Curve Manager Use Case: Independent Price Verification and Regulatory Reporting
ZEMA lets clients automate both their independent price verification processes and report generation to regulators. This is done via ZEMA’s automated process and workflow engine Curve Manager. Essentially, an IPV automated process, developed for clients by ZE’s Business Solutions team, allows for the comparison of trader’s marks to external market prices. Traders marks are captured, either via a processor (data interface) pointed to an internal, structured file containing the marks, or via Curve Portal, ZEMA’s Excel add in for uploading data, which is then uploaded/imported into a client’s ZEMA database. This database, the client’s intellectual property, also contains external market data, for example exchange data from ICE, NYMEX, or other exchanges. This data, held in curves, can then be compared to the external data in a series of checks. These validation stages can be as simple or as complex as the client requires, can be gated, event-driven or batch built. If these checks are completed within the validation parameters set up by the client, the resulting results can be persisted to target systems, and reports can be automatically generated. These reports, through ZEMA’s new Report Generation Adaptor, can be structured as required, formatted as required, and persisted to a target email inbox, network drive or other location for end-user consumption. This means that if all IPV checks are validated, a report can be automatically persisted to Regulatory bodies.
If the IPV process fails at a validation stage, a notification can be generated for human intervention. For example, if a trader’s mark is too high or low when compared to external market sources, a risk manager can be notified to take a look at the failed validation check to determine remedy measures, whether those be having the trader reevaluate their marks, or assuming the mark is correct. Once this intervention remediates the validation check, the rest of the process should complete, and the report generated.
This combination of IPV and Report Generation adaptor, utilizing ZEMA’s Curve Manager, automates large intra-day and end of day processes for the Trade and Risk portions of an organization. Make sure you are always compliant with regulating bodies, and that your trade and risk processes are transparent, auditable and correct by leveraging ZEMA, the end to end data management solution.