Operations managers in Asia have often felt the pressure of settling and clearing in trade volumes that have fluctuated wildly, and the future is likely to be even more extreme. As well as a greater choice of traditional and alternative exchanges on which your firm might trade and settle, it is highly likely that China will soon deregulate her capital markets further to allow Chinese retail investors to access foreign markets and their more sophisticated products. This will result in orders of magnitude increases in transaction volumes for your staff, your existing systems and your processes.

Meanwhile, Asia has remained a fragmented set of trading markets, without the benefits of harmonization that Europe has enjoyed under its regional governance. It appears to us that Asia is unlikely to move this way in the future, leaving managers such as yourself until now a choice of building and maintaining many different local market interfaces or purchasing clearing services from third party providers.

Brokerages and banks in the region have historically under-invested in back office systems due to various factors such as the ’97 Asian crisis, the Y2K remediations, the dot.com distractions, etc. They are now beginning urgently to re-equip their back offices to support the anticipated trading volume increases across fragmented markets. The key criteria they are using to select a modern middle and back office system are:

• Workflow-based. Only a system fundamentally designed around workflow processes can support responsively the constantly and fast changing trading environment.
• Rules engine-based. With that elusive goal of 100% straight through processing (STP), the system must be able to add or change rules ‘on the fly’, to cope with the wide and changing variety of, and exceptions to data formats regularly used by counterparties, including customers, custodians, data providers, etc. When authorized users can easily amend processing rules in real time at any level of trade granularity, the 100% STP goal becomes much more achievable for much longer periods.
• Straight Through Exception Processing (‘STEP’) capabilities. Even with the ability to fine tune workflow processing and exception rules easily, trade breaks and exceptions are bound to occur in multi-market and cross-border trading scenarios. The system should be intelligent enough to figure out how to repair a trade automatically as well as apply the repair to any other affected trades.
• Technology obsolescence-proof. A well designed back office system will clearly separate the technology and business layers so that, as technology standards evolve, the technology can be replaced and modernized without touching or affecting the business processes and rules that have evolved uniquely for the organization’s business model, markets footprint and customer base.
• Scalable. Linear scalability which can be provided with ‘Grid’ based computing architectures must be available to meet unknown increases in future trading volumes.

Serisys found such a system, called Syn~, that meets all these criteria, and is why some of the leading brokers in the region today, such as SetClear are enjoying higher STP rates, higher back office productivity, and improved customer service. In Syn~ business logic is stored as data not code and configured in a modelling environment which practically eliminates coding and programming. We are part way through a program of building all the local market interfaces so that our clients can enjoy self-clearing on a single platform (Syn~) and on a single physical copy of the software (data export regulations permitting).

We offer various modules of the Syn~ platform in the region, and a description of each is available from the following links: