Objective

To allow the client to improve accuracy and save time by automating the OTC confirmation document generation process.

Challenge

Existing manual process for drafting OTC Confirmations for Structured Products required significant bandwidth and resulted in low accuracy, long cycle times and limited capacity.

CRISIL's Solution

CRISIL created an automated OTC confirmation document generation process through the following steps:

• Defined the prioritization of Structured Product trade types based on product volumes
  
• Configured the Confirmation Automation System to capture all of the parameters and price schedules for Structured Products from the Risk Management System (RMS) feeds
  
• Automated Confirmations
  • Analyzed payoff methodologies for identified RMS models;
  • Created templates for capturing all of the RMS payoff scenarios;
  • Included STP control events for rarely booked parameters, which were not coded, to prevent auto-STPs and improve accuracy rates;
  • Applied existing business rules governing the trade non-economics;
  • Included counterparty specific exceptions for Special Handling cases
    
• Finalized with Documentation & Audit:
  
  • Established Maker-Checker procedures for template reviews & signoffs;
  • Documentation of the project’s progress, Automation Roadmap, Procedure Documentation;
  • Established MIS Reporting, Governance & Escalation Frameworks
     

Client Impact

• STP Rates improved from 35% to 80%
• Improved confirmation accuracy
• Expanded volume handling capacity to support business growth
  

Questions

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