A solution for automating two/three-way matching of Treasury Confirmations (MT3nn)
A Treasury Confirmation is the manual record of a deal ticket produced by a Front-Office Trader and consists of many fields of information. It differs between individual types of transaction such as spot and forward Foreign Exchange and Money Market deals, Derivatives, etc.
Treasury confirmation matching involves whichever of:
and may include any subsequent AMENDs, CANCELs, ROLLOVERs, etc. Our's and the counterparty's confirmations may be collected as they pass through the SWIFT terminal, whilst broker confirmations can typically be received from Reuters 2000 or the ACS network.
Swallow Technology was the first supplier to produce a system that could genuinely match confirmations both two and three-way. Which means that the SMART-CONFIRM product not only matches a Counterparty Confirmation (THEIR side), against a Bank Confirmation (OUR side), but also (when relevant) incorporates a BROKER's Confirmation into a match. This is then compared to both the THEIR and OUR sides, making it a full two or three way matching system.
"Matching" is a main system process within SMART-CONFIRM, which is
During the matching process SMART-CONFIRM attempts to find the best possible matches and grades each one according to the quality parameters (matching criteria) set up by the user. Match qualities are
Once SMART-CONFIRM has determined the quality of a match, it will assign it a status and place it within a relevant system queue, either 'Confirmed', 'Offered' (to the users for review) or "Outstandings" (unable to be "matched").
The match queues divided by status (Offered, Confirmed), are further subdivided by message type and counterparty/account or composition as appropriate, with access restricted by user.
Matches are presented one-by-one and the users can take the appropriate action on each. The queues allow multi-user access with matches currently in use by another user being bypassed.
In all situations, the user may either
SMART-CONFIRM will always attempt to find the best match for an item, but the data may be of a quality such that items belonging together do not have sufficient common elements for them to be offered as a match, or the relevant matching items may not even have been received into SMART-CONFIRM at this time. These items will remain in an "Outstandings" queue.
For those institutions that utilise the three-way matching functionality, there is also the facility for
SMART-CONFIRM has a very comprehensive and versatile follow-up and chaser capability, which enables the user to easily create :
for sending to other Counterparties, or alternatively to create correspondence to various internal departments.
A major area of concern within Confirmation Matching is the requirement for tracing or chasing of Confirmations queries, for example, when one side of a forward trade has not been confirmed and remains outstanding for a certain period of time.
In such cases Counterparties can be chased at an individually set number of dates after initial transaction date.
SMART-CONFIRM has the capability of producing all these tracer messages
This alleviates the User having to manually compose each message and insert details of each trade to be chased.
SMART-CONFIRM can run as a departmental system in the Back-Office of the Trading Room, or as a central application for all reconciliation tasks in a specific Control Department. Both will be equipped with a great enhancement of their ability to expertly resolve queries and investigations quickly and efficiently. Matching of Confirmations is a crucial function for a Treasury Environment and is normally referred to as the 'Last Line of Defence' for stopping errors.
SMART-CONFIRM matches confirmations automatically, leaving the staff to deal with the exceptions and anomalies such as: