Application module for OTC derivatives

Application module for OTC derivatives

"Waiting is silver, taking action is gold!"

Ivana Milicevic, Senior Consultant Trading & Financial Markets, targens

 

Situation

The implementation of the EU regulation EMIR (European Market Infrastructure Regulation) for OTC derivatives, requires a new application module from the software manufacturer to be integrated into a bank’s system. The module generates a single EMIR message per transaction, which is then forwarded to a central transaction repository. This will provide the regulators with access to the accumulated data. The delivery can be delayed by external factors, where the bank will then be faced with the choice of waiting for delivery of the application module or conduct the implementation of changes on its own. Problem: In case of a non on-time introduction, the regulator would not have access to the appropriate data, which could result in fines and reputational damages. Since the regulation was introduced, it has been subjected to several amendments and adaptions. This makes it increasingly difficult for the software provider to guarantee an early deployment of the module.

Approach

In order to take advantage of the waiting time, in 2015 (EMIR Level 2) we decided to build a complete and automated regression tool ourselves, since the test cases were executed manually at that time. Thereby, the aim was to address programming errors ("bugs") to the software manufacturer as quickly as possible, and to repeat the regression test after every further delivery until the test was 100% successful.
The decision to develop the module in-house (customizing) proved inevitable in 2017 (EMIR Level 3) due to a large number of adaptations and a low coverage through the module. We were able to shorten the development and test cycles considerably by implementing agile working methods in order to fulfil the tight schedule.


Indicator Status

After the project completion, our customers were able to meet the requirements of the EU regulation on time. The specified goal was achieved on schedule and within the monetary constraints - on time & in the budget. The automated test environment set up by the customer, including the regression tool, can be reused for future developments, and thus provides further benefits for our customer beyond the end of the project.

 

 “We successfully conclude the projects entrusted to us together with the customer by applying sound expertise, sovereignty and professional competence. That's not just what we promise. That's what we deliver."

Ivana Milicevic, Senior Consultant Trading & Financial Markets, targens