BNPP, GEM, and Systemwire break new ground in OTC Derivatives reconciliation
London, 5 April 2005
New York-based Global Electronic Markets LLC and London-based Systemwire Ltd. today announce a license sale of their innovative FpML Mediator software platform to BNP Paribas, one of the leading institutions in the global derivatives market. This transaction represents the derivative industry's first installation of a commercial third-party FpML reconciliation system.
BNP Paribas will use FpML Mediator to reconcile across global systems for over-the-counter (OTC) derivatives such as Interest Rate Swaps. FpML Mediator has passed BNP Paribas' rigorous acceptance tests for functionality and performance and entered production service during February 2005.
FpML Mediator provides automated trade matching and rule-based trade validation of OTC derivatives and other financial instruments, enabling market participants to minimize mismatches and reduce the time frame for processing. The software supports any instrument that has a FpML protocol, such as IRS, Credit Default Swaps (CDS) and Equity Swaps, plus any standard or user extension that is consistent with the FpML design rules.
"We will first be using FpML Mediator for internal reconciliation, but we were also attracted by Mediator's ability to be used in other applications, such as reconciliation with service providers," noted Steve Gillen, CIO of BNP Paribas Fixed Income.
Given its large daily trade volume and the need for real-time reconciliation, BNPP required high performance and a minimum number of false breaks. Mediator provides those benefits with an efficient internal architecture and highly configurable matching policies. Mediator's ability to work off-the-shelf with BNPP's proprietary extensions to FpML was also critical.
"We anticipate that other derivatives dealers and end users would have an interest in this type of tool and are active participants in industry-wide discussions to address requirements for validation, matching, and reconciliation of OTC Derivative trades for all participants in the market," noted Brian Lynn, CTO of GEM.
About Global Electronic Markets
Global Electronic Markets (www.global-emarkets.com) provides services and products for firms using FpML and related standards. GEM's services include standards development and advice, technology management consulting and portfolio reconciliation services using GEM's FpML toolset. GEM Development supports a set of products focused on enabling the creation, reconciliation, transformation and storage of FpML and related standards. Brian Lynn, GEM's CTO, is an editor of the FpML standard, a member of the FpML Standards Committee, and chair of the FpML Pricing and Risk working group. GEM is based in Ulster County, NY.
Systemwire Ltd. (www.systemwire.com) is a software company whose applications solve the problem of data validation. Systemwire's products are based on XML and utilise innovative technology for executing validation rules across multiple documents. The company has been closely involved in the development of FpML and the team has deep knowledge of the standard. Systemwire Technical Director Christian Nentwich is chair of the FpML validation working group. Systemwire was founded at University College London based on research carried out at the Department of Computer Science.
About BNP Paribas
VP North American Marketing
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