Operations and finance

MX.3 streamlines the full hedge accounting process end-to-end, be it micro-hedge or macro-hedge, with a broad coverage of hedge types (e.g., fair value hedge, cash flow hedge, net investment in foreign currency hedge).

MX.3 increases transparency and visibility, giving end users, managers and auditors a complete view of the full hedge accounting chain, from trade booking to documentation to financial statements.

With automated and integrated business processes, including trade management, document management, risk calculation, reporting and sub-ledger functionality, this solution helps reduce operational risk by providing:

• Smart designation of hedges by traders and product control with pre-defined strategies

• Specific events (e.g., de-designation, rebalancing, refresh) with a full audit trail

• Retrospective and prospective effectiveness measurements using various qualitative and quantitative methods

• Dashboard to monitor effectiveness and P&L impacts of designated hedges

• Automatic generation of documentation with hedge characteristics

• A process for bucketing macro-hedge relationship flows and optimization of asset and liability usage

• Prepackaged and customizable hedge accounting schemas, dedicated reporting tools and live screen reporting

The MX.3 multi-GAAP, multi-entity and multi-currency solution provides accurate financial information for all asset classes, leveraging front office and risk calculation engines for valuations, accruals, amortizations and hedge reclassifications.

In addition to entries posting at transaction level, it supports concurrent inventory cost methods (e.g., FIFO, AVP, cherry picking) with robust capabilities to drill down to the contributors of the position providing accessible, reliable, transparent data.

Some of the built-in ledger functions include FX management, which balances calculations with the ability to book balance adjustments, as well as accounting periods management and automated feed to the general ledger.

MX.3 evolves with accounting market practices and its integrated nature allows any new products to be easily handled and speedily released to trading teams.

The XVA solution provides deal-per-deal attribution for credit valuation adjustment and funding valuation adjustment to the accounting solution. It enables compliance with Accounting Standards Committee topic 820 and the International Financial Reporting Standards (IFRS) 13. Trade level CVA and FVA can be allocated to the proper unit of account. XVA P&L can be fully broken down by various effects such as time decay, market (e.g., forex, interest rates or spreads movements), trade and market operation effects.

With MX.3, the product control department can manage entity and group consolidated official P&L and P&L attribution cross-asset, across the trading and banking books.

P&L attribution can be done cross-asset with segregation of different explanation reasons, such as time, market data and life cycle changes.

P&L is calculated on the official position scope models and market data within MX.3, following market standards to assist in accounting standards compliance. Alternately, P&L can be imported from other system sources, with the ability to correct and enrich the figures in MX.3 (e.g., adjustments, reserves) and recalculate on demand.

P&L and P&L attribution can be validated altogether, with trader sign-off and official reference P&L crystalized and published to trading, risk and for sub-ledger reconciliation. On-screen drilldown analysis and reporting allow for a performance hierarchy consolidation down to transaction and position levels, with the ability to check transaction and market data details.

Independent market data and models support an Independent Price Verification (IPV) framework.

MX.3 for Collateral Management has helped more than 100 financial institutions streamline collateral operations with regulatory compliance. It recognizes that collateral management has become very intertwined with many business functions within financial institutions.

MX.3 supports full compliance with uncleared margins rules (UMR) across jurisdictions, from the full support of ISDA SIMM and schedule-based initial margin calculation methodologies, down to connectivity to key tri-party agents and third-party custodians.

Operational efficiency can be maximized with bilateral and cleared relationships seamlessly managed within one system.

MX.3 supports improved STP rates by enabling connectivity to key market utilities such as Acadiasoft Margin Manager and Initial Margin Exposure Manager (IMEM).

Beyond the automation capabilities enabled, which include margining, allocation, settlement and accounting, MX.3 is designed and uniquely positioned to provide integrated functions: optimize allocations according to cheapest to deliver, maintain enterprise inventory of securities, integrate with securities finance, refine XVA pricing and risk management and comply with regulations such as SFTR and SA-CCR.

With a clear focus on openness through public APIs, smooth integration and digitalization use cases are enabled at lower cost within financial institutions’ ecosystems.

As a back-office user, the processing work is reduced to the minimum with a high degree of automation from matching to clearing and settlement.

Right after an execution is done, the process is automated with platforms such as DTCC CTM and Markitwire or the SWIFT matching solution. Exceptions are handled manually from a dashboard with a bird’s eye view. The custodian is then automatically notified through SWIFT.

Powerful KPI reporting for operational risk control and regulatory indicators is provided, as well as statistics on time-to-match, time-to-clear.

Used by more than 250 institutions across the globe, the MX.3 settlement solution manages the complete life cycle of settlements, from automated release to settlement status reconciliation. This ensures high STP rates while controlling operational risk through dedicated dashboards, across all business lines and asset types, leveraging:

• Automatic assignment of standing settlement instructions (SSI)

• Multiple payment methods (e.g., gross, net, CLS, DVP, FOP, PVP, pre-delivery) and channels (e.g., SWIFT, over account, RTGS)

• Full support of the transition from SWIFT MT to SWIFT MX (i.e., ISO 20022), compliant with cross-border payments guidelines and local real-time gross settlement systems (e.g., TARGET2, CHAPS, FEDWIRE)

• Real-time view of nostro cash and security accounts for intraday settlement and next day projections for accurate funding and security inventory monitoring, with interfaces to reconciliations tools

MX.3 is tailored to manage asset class specifics, from securities settlement for securities finance to cash payment for the high-volume FX business, harnessing CLS services, from automated eligibility, submission and matching to settlement.

MX.3 helps financial institutions comply with various transaction-based regulatory regimes, such as G20 Transaction Reporting and Securities Financing Transactions Regulation (SFTR). In the context of a major rules review, MX.3 reduces the burden of transaction regulatory reporting implementations featuring:

• Reporting eligibility to determine reporting obligation and data enrichment process

• Reporting initiation that includes a business logic to trigger reporting messages in the post-trade and at end of day

• Data mapping, format transformation and connectivity to trade repositories, including DTCC GTR

• Real-time exception management and monitoring, including mitigation actions for exceptions such as reporting resubmission

• Post-reporting reconciliation with DTCC-GTR, with OOB extractions and data mapping against DTCC-GTR Trade State Report

MX.3 enables the management of corporate actions, from sourcing to settlement across various asset classes—equities, fixed income and securities finance:

• Voluntary, mandatory and “mandatory with choice” events management for securities, listed and OTC derivatives

• Full life cycle management, including notification, simulation of elections, reconciliation, settlement and accounting

• Corporate actions journal management and automatic propagation to positions, trades and static data

• Automated allocation to internal books through configurable rules

• Withholding tax and reclaim management

MX.3 empowers institutions with a single repository for trades, orders, positions and reference data, based on a few core foundations:

• MX.3 features a multi-source, multi-entity, connected global repository supporting our clients’ current and future operating models; it seamlessly supports back-to-back trades, risk allocation, and inter-entity structures.

• MX.3 enjoys the widest instrument coverage in the industry, from flow to complex products.

• Positions are natively represented to serve different business processes.

• High-throughput integration capabilities for trade execution and positions are supported.

MX.3 features a rich set of data-driven business objects to support smooth trade processing, static data set-up and to ease maintenance:

• Counterparties: core data as well as settlement instructions and confirmation instructions.

• Agreements: Master agreements including key provisions used across the platform (e.g., close-out netting), collateral agreements (CSA, GMRA, etc.), netting agreements.

• Holiday calendars: with connectivity to market utilities such as Swaps Monitor.

• Security instruments: across both equities and bonds, with out-of-the-box connectivity to Bloomberg to collect ISIN data.

All business objects come with standard data management functionalities (e.g., lineage, extension capabilities, audit, four-eyes validation) and can be synchronized with external repositories.