Banking products success stories

Implementation of the Murex IM Module – SIMM Method

Our client is a Spanish financial entity listed on the IBEX 35. This nationwide firm specialises in providing services to private and corporate clients, and also works in the field of cooperative banking.

opportunity

Managing regulatory compliance

After the collapse of various financial institutions such as Lehman Brothers in 2008, financial regulatory agencies have striven to implement mechanisms with a view to improving the management of financial institutions and reforming the financial markets. The EMIR and DFA regulations were put into place to increase market transparency and stability of OTC derivatives. These regulations introduce requirements for the counterparties that operate with these derivatives:

In this context, the client issues a call for tenders for specialist consultancy services, with a view to helping them ensure strict regulatory compliance with regard to the need to exchange Initial Margin on bilateral OTC derivative transactions. This can be calculated using the SIMM (ISDA) method and coordinated with the Market Risk Department, both as regards approving the solution and drafting documentation requested by the institution, regulatory bodies and auditors.

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focus

A comprehensive multidisciplinary service

The client opted to work with Common MS, given its specialist knowledge and prior experience with other leading financial institutions, both with the Murex application on a technical and functional level, and in the area of risks and regulatory compliance, as well as in collateral management. This project required a Risks and Regulation expert team that, in turn, boasted the technical knowledge to work with the system management department and the Murex provider.  The project is managed under agile methodology with four sprints (design, implementation, approval and Go Live).

SOLUTION
An all-round solution
The solution had to cover the entire workflow, from signing the counterparty contract, provision of all parameters and static data to calculations and reporting, settling, accounting and collateral management. The client opted to implement the Initial Margin module for the Murex application, given that the client was already working with this system for its front-to-back operations.

The implementation of this module required that the Risk and Systems departments work closely with the Murex provider. The implementation was completed without any delays and all deadlines set in the planning stage were met. Production began and the module was stabilised with no incidences. Common was selected for the subsequent phases of the project.
MADRID
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