SimCorp, a provider of specialised software and expertise for the investment industry, has released a whitepaper discussing the technology considerations a buy-side firm should take into account on their road to Dodd-Frank compliance.
The paper, entitled ‘Impact of Dodd-Frank on OTC Derivatives: Supporting Central Trading and Clearing’, details SimCorp’s recommendations for preparing a buy-side firm’s technology infrastructure to support regulatory changes around the over-the-counter (OTC) derivatives market. Included in the whitepaper is a self-assessment checklist, which investment managers can use to evaluate their investment system capabilities and readiness for Dodd-Frank.
Among the recommendations are:
- Support for enterprise data management for a 360-degree view of risk and performance.
- Automate valuation to calculate profit and loss and generate margin calls to reconcile discrepancies between the investment manager and transacting counterparty.
- Straight-through processing (STP) for OTC swaps.
- Detailed and easy-to-access audit trail throughout the trade lifecycle.
- Broad instrument coverage that includes centrally and bilaterally cleared trades, as well as instruments that fall outside the scope of Dodd-Frank.
“We developed this whitepaper as a starting point for investment managers to evaluate how well their current infrastructures can deal with the impending reform,” said David Kubersky, managing director (MD) of SimCorp North America. “The transparency and disclosure that an investment system is required to provide in support of Dodd-Frank is also essential for a real-time view into investment performance. SimCorp’s integrated yet modular approach for front-to-back office workflow automation provides our clients with a platform that ensures compliance, but also supports the growth and profitability of their business.”
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