Successful Swap Mastering and Automation Using Markit EDM

The Situation

A leading global asset manager focused on using a highly defined, disciplined and repeatable process while supporting health research had successfully implemented Markit EDM. The firm was using the Markit system to master a number of equity securities and wanted to provide the same level of governance to its swaps. By extending the firm’s security masters to include swaps through an automated process, the firm would be able to ensure greater data control and compliance through the front, middle, and back offices as the trading volume of swaps increased.

The Continuus Approach

Because swaps are a complicated investment, considerable time was spent planning the implementation process. We determined which investments would be mastered, the requirements for mapping attributes, and how data feeds would be used. We took time to ensure that the new processes using Markit EDM did not break current processes used to maintain equity securities, or the reconciliation processes for the securities within this specific project. Due to the way swaps were handled by the firm’s investment book of records (IBOR), it was important that we spent time planning the relationships for the data. At the same time, we needed to ensure the user interface was designed in a way that allowed the components of the swap to be viewed together as a single security by the front office.

The Result

The new swap automation process provides robust data quality checks and governance, ensuring that only quality information flows into the downstream systems. Validations can be met automatically and anything that is overwritten can be validated as well. The improved confidence in swap data through the front, middle, and back offices is supporting the firm’s greater focus on swaps and an increase in swap trading volume. This helps the firm meet its business goals of using disciplined and repeatable processes to manage equity, fixed income and alternative investments.