Regulatory Compliance & SPAN Margin Optimisation

Client Story:  Tier-1 Bank Toronto / London

MapleRisk have been successfully helping our global markets clients deliver complex change programmes through an Agile DevOps approach.

In this post we discuss how our domain experts work collaboratively within our Agile DevOps framework drawing from multiple disciplines including solution architecture, engineering, and data scientists backed by a deep understanding of front-to-back trading and risk management fundamentals to assist the client with mapping Bank of England and FSA business rules into actionable technical specifications and deliver a regulatory reporting solution using their chosen systems – a mandatory requirement before the business could go live.

This global leader in precious metals trading and finance wished to expand their business and start a base metals desk. MapleRisk was engaged by the client to help develop regulatory compliance solutions for their nascent base metals business.

Another critical go-live requirement was to implement the Standard Portfolio Analysis of Risk (SPAN) system to monitor and optimise performance bond (margin) requirements.

MapleRisk Approach

MapleRisk provided commodities domain expertise to translate the business requirements to technical specifications for regulatory and SPAN interfaces to their core trading system Murex.

MapleRisk developed the interfaces using an Agile DevOps framework with MapleRisk experts working closely with the business, in-house IT and the vendors to deliver a complete solution utilising Murex and other downstream systems under a business critical deadline.

MapleRisk were further invited to review the client’s full risk reporting suite and workflow providing recommendations on how to rationalise and optimise them.

Outcomes

The regulatory reporting suite was delivered on time and within budget and the client was subsequently granted license to trade the commodities.

The client developed in-house capabilities to replicate the SPAN margin model that allowed smarter decision-making about what trades to make based on cost savings in margin utilisation.

Following MapleRisk’s review and recommendations the client rationalised its’ risk reporting suite across precious and base metals leading to a streamlined workflow and leaner Murex trading platform.