T-Zero, Omgeo Respond to Call for Better Derivatives Processing

Derivatives and the way they're handled have been under the glare of the spotlight ever since the Fed's intervention in the Bear Stearns crisis, which was largely precipitated by the firm's highly leveraged credit derivatives positions. "These [over-the-counter derivatives] markets have grown tremendously; but the infrastructure has not kept up — and it must," said Treasury Secretary Paulson in mid-March. Last week, 18 major Wall Street players and three organizations (ISDA, MFA and SIFMA) sent a letter to Timothy Geithner, president of the Federal Reserve Bank of New York, in which they vowed to continue to automate credit and equity derivatives processing, including making consistent use of electronic confirmation platforms and submitting novation requests (replacing one obligation with another or replacing a party to an agreement with a new party) via electronic platforms rather than by email.

We knew it would only be a matter of time before derivatives processing platform vendors would come out with upgrades to meet these requirements So far, we've seen announcements from T-Zero and Omgeo for automating novations and repurchase agreements.

T-Zero addressed the novations requirement by rolling out Novations+ processing for its credit derivative affirmation platform. The new technology integrates with the DTCC's Trade Warehouse and enables buy-side and sell-side firms to submit novation requests electronically rather than by email, even for blocks of trades. T-Zero says it has more than 180 users who are buy-side firms, dealers and prime brokers.

Omgeo's announcement yesterday focused on repurchase agreements. The company announced that its customers can now process repurchase agreements and reverse purchase agreements through its TradeSuite platform, alongside U.S. equity and fixed income products through its Oasys TradeMatch trade confirmation service. Omgeo says the addition of repo functionality in TradeSuite is part of release 7.0, which gives trade counterparties the tools to enhance internal workflows and limit the use of paper in post-trade processing.

Source URL:http://www.financetech.com/showArticle.jhtml?articleID=207001550

Publish Date: 03 April, 2008

T-Zero releases credit derivatives processing technology

T-Zero, the most widely adopted credit derivative affirmation platform, has released its next generation 'Novations+' processing technology.

The new technology is fully integrated with the DTCC Trade Warehouse and directly addresses the new industry commitments announced by the Operations Management Group (OMG).

The launch of Novations+ also comes amid renewed calls from U.S. Treasury Secretary Henry Paulson and from regulators, including the Federal Reserve Bank of New York, for additional scale, automation and standardization in credit derivative processing.

Novations+ functionality enables buy-side and sell-side market participants to achieve 2008 novation targets set by the OMG to submit novation requests via an electronic platform rather than via email.

Additionally, the new technology allows the credit derivative industry to scale novation processing by providing system-to-system connectivity, interoperability and automation for even the most complex novation operations involving prime brokers and fund allocations. Such operations are not currently automated by any other industry platform.

"Novations+ represents the next big technology shift in the automation of credit derivative processing," said Mark Beeston, President of T-Zero. "The new platform is uniquely positioned to address scaleability issues highlighted by the OMG and Secretary Paulson." According to Beeston, key elements of Novations+ functionality include:

• Electronic novation request directly from Warehouse records using T-Zero GoldSync+^ TM
• Industry standard novation workflow to allow novation consent on T+0
• Automation that promotes industry standards including ISDA Novation Protocol II
• Point-and-click support for complex novation operations including:
  • Block novation of trades originally allocated across multiple funds
  • SuperBlock^TM novation of an entire trading position composed of multiple trades
  • Partial novations where only a percentage of the original notional is transferred
  • Prime broker 3-party "stay-in" and 4-party "step-out" novations
• Global front-office distribution of novation functionality via Bloomberg Professional

In a little more than two years since launch, T-Zero has been adopted by over 180 buy-side firms and most major dealers and prime brokers. The platform's open architecture integration framework, known as AgnosticConnectivity^TM , has allowed it to API-connect directly to the front-office systems of dealers and prime brokers as well as buy-side firms. The model allows T-Zero to provide counterparties with real-time notification of trade details and T+0 resolution of trade-entry errors via industry standard electronic workflow.

"Our clients recognize the need for scaleability to accommodate growth," said Clive de Ruig, Head of T-Zero, North America. "Novations+ was developed in collaboration with our dealer and buy-side clients to dramatically improve the industry's ability to handle exponentially increasing trade volumes."

"We are very pleased to have implemented Novations+," said Tetsuya Akutsu, Senior Vice President, Mizuho Alternative Investments, LLC. "We are using it to fully automate our novation processing and to improve our operational efficiency with the major dealers."

"We have been a T-Zero user for well over a year now and it has clearly improved operational efficiency and reduced risk," said Paul Winter, Head of Derivatives Operations at Fortis
Investment Management. "We have evaluated many platforms and some are still developing what has been on T-Zero all along. Novations+ is a significant leap beyond anything else that is out there."

Source URL: http://www.finextra.com/fullpr.asp?id=20607

Publish Date: 28 March, 2008

Tullett Prebon Signs on to Derivatives Platform

Inter-dealer broker joins T-Zero

Confirming recent predictions that sell- and buy-side firms will escalate their spending on derivatives processing, London-based Tullett Prebon, a voice and electronic inter-dealer broker in the global derivatives market, agreed today to use T-Zero's platform for post-trade straight-through processing of derivatives.

Tullett Prebon is the third inter-dealer broker to join the T-Zero platform, which provides capture, affirmation, allocation, novation and termination of trades to inter-dealer brokers, buy-side firms, prime brokers and service providers.

By Penny Crosman

Source URL: http://www.wallstreetandtech.com/showArticle.jhtml?articleID=206904996
Publish date: March 20, 2008

T-Zero Integrates With GEM’s FpML Mediator

Source: Wall Street and Technology
URL: http://www.wallstreetandtech.com/blog/archives/2006/12/otc_derivatives.html

Global Electronic Markets (GEM) has integrated the trade comparison component of its FpML Mediator software platform with T-Zero, the service provider in credit derivative processing.

T-Zero has integrated the FpML Mediator trade comparison component with its existing service that is being utilized by numerous buy-side and dealer clients.

This will enable T-Zero’s buy-side clients to perform trading activities such as assignments and early terminations on credit default swap (CDS) trades with the assurance that they are in synch with the trade state maintained by the DTCC’s Deriv/SERV derivative trade confirmation service. For example, when a T-Zero client wishes to perform a transaction on an existing CDS, T-Zero retrieves the deal’s details from DTCC and uses GEM’s FpML Mediator component to compare the client’s version of the trade with the information retrieved from DTCC.