Case Study: OTC Settlements

Unwinding and Settlements for Over the Counter (OTC) Derivatives involved issues causing operational inefficiencies. Tax Lot selection could not be handled well by Portfolio Accounting System for Credit Swaps, as different symbols/tickers were used for the same reference entity. Additionally, settlements involved several steps spanning over multiple days, which were hard to track and/or audit.

Solution

NorthPoint Solutions built a .NET based Windows Application based custom workflow management process for the settlements. The application integrated with the Portfolio Accounting system for trade details and for automated updates of the Settlements process. The Application also integrated with the Order Management System for tax-optimized tax lot selections. It also generated Wire Transfer instructions and/or Letters of Authorization.

Benefits

  • Provided an integrated view and settlement controls of all OTC trades
  • 80% less time required for matching trade details with broker statements
  • Reduced 99% of manual entry errors
  • Enabled monitoring current trade state in the settlement workflow
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