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FEATURES<br />
Tracking new developments in<br />
currency derivatives processing<br />
Increasing numbers of banks, asset managers,<br />
pension funds, hedge funds, and corporates are<br />
looking to ramp up their use of currency<br />
derivatives, both for hedging purposes as well as<br />
a <strong>com</strong>ponent of their fund and investment<br />
management strategies. Although great strides<br />
have been made in automating much of the<br />
processing and workflow associated with Over<br />
The Counter derivatives, much still remains to be<br />
done, particularly with regard to cost savings<br />
and risk management.<br />
Much has been achieved in attaining straight<br />
through processing for vanilla FX products<br />
and options, and now with volumes increasing<br />
the focus is one cost efficiency, and cost per trade, and<br />
58 | january 2010 e-FOREX<br />
By Frances Maguire<br />
the smooth operations of processing so that exceptions<br />
are managed efficiently. The recent crisis has not only<br />
made banks focus on the operation risk of failed trades,<br />
but also reputational risk, where failed trades can impact<br />
credit and counterparty risk management.<br />
Messaging<br />
The world’s leading financial market messaging<br />
standards organisations have been collaborating since<br />
2008 to create a financial messaging Investment<br />
Roadmap. This collaboration – by Financial Products<br />
Markup Language/International Swaps and<br />
Derivatives Association, (FpML/ISDA), FIX Protocol<br />
Ltd (FPL), the International Securities Association for<br />
Institutional Trade Communication (ISITC) and<br />
Swift – lays the groundwork to establish one<br />
<strong>com</strong>mon financial messaging standard, ISO 20022,<br />
while maintaining the existing independent protocols.
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