11.22.2011
By Terry Flanagan

Middle Office Technology Expands

Market volatility and regulations drive platform upgrades.

Investment firms are ratcheting up their demand for industrial-strength middle office platforms.

They are looking to maximize value from core systems with wider functional and asset class coverage. Support for derivatives and reconciliation processing as well as regional tax and market practice requirements, can help firms balance the need for innovation with the operational efficiency of a single post-trade environment.

“Today’s investment management firms demand more than just data analytics,” Arun Sarwal, chief executive for investment management solutions at DST Global Solutions, told Markets Media. “With market volatility and regulatory demands heightening, firms require accurate data and analytics on-demand.”

Stringent regulatory requirements have upped the ante for downstream processing and reporting requirements.

The buy-side will have three main priorities, said Sarwal: responding to changes in compliance, regulation and accounting, transparency and timeliness of investment data, and educing operational costs and maximizing operational efficiency through smarter deployment of technology.

“Our ability to respond to these priorities and deliver tightly integrated, innovative solutions will help buy side clients continue strong growth and success into the future,” he said.

DST Global Solutions has launched an upgraded version of HiPortfolio, its investment accounting and asset servicing solution.  This version is the latest in a regular cycle of functional and technical enrichment, based on client needs and the company’s R&D program.

As an integrated fund accounting solution, HiPortfolio provides trade and investment cycle functionality from execution to settlement.

“With regulation regimes changing and evolving, DST Global Solutions strives to help existing and new clients prepare to embrace change,” said Sarwal. “This is particularly important in the back office, as investors and regulators demand greater post-trade transparency and more stringent reporting in line with new standards.”

HiPortfolio has extended the depth of processing in a number of key operational areas in terms of derivatives processing, reconciliation and unit pricing to offer operational efficiency and help deliver cost reductions.

Derivatives processing has been enhanced to provide capability for Total Return Swaps (TRS) and Contracts for Difference (CFD).  In the area of reconciliation, the improvements provide more module parameters to meet diverse sets of business processes, such as FX reconciliation, and the ability to trigger e-mail alerts to speed up exception resolution.

For unit pricing, the focus has been to streamline the operational process, by providing more configurations in the creation of attribution reports to explain exceptions, to speed up the key area of issue resolution and to ensure that unit prices are published on time and in high quality.

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