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Transaction Reporting Framework for MiFID
MiFID transaction reporting encompasses business processes which involve handling of diverse securities transactions within a bank, generally occurring across a multitude of applications spread across many systems. These business processes have their own processing rules. Organizations should be able to reuse and combine functionality embedded in existing applications with new functionality to deliver composite applications that meet MiFID requirements. This entails defining a business process management framework which defines new end-to-end processes with business functions encapsulated in services, rather than focusing just on customizing applications. Most importantly, given that the MiFID directives are still evolving and that new rules and regulations are likely to be introduced, the services ought to be agile and robust.
HCL Solution Framework
HCL solution is an SoA-based enterprise architecture which can deliver agile and flexible solution addressing the ever-changing business needs. An abstract view of this framework depicts it as a layered architecture of composite loosely-coupled services that align with business processes. This clear separation of concerns provides unprecedented flexibility with options to plug-in new services or upgrade existing services. It can also expose existing enterprise applications as services, thereby safeguarding existing IT infrastructure investments. The business process flows are supported by choreography of these exposed services into composite applications integrated through an Enterprise Service Bus (ESB).
Other key aspects of this framework are:
- A data filtering mechanism for cleansing trade data obtained from multiple systems. This can increase ease of addition of new instrument classes from different trade data systems and handle feeds from source systems both in batch mode as well as real-time
- Rules engine to pick up the right trades for transaction reporting to ensure transparency in application of the business rules with mechanisms to view the processing logic/rules which were applied
- Flexibility in addition of reporting mechanisms - single-gateway for external connectivity to reporting mechanisms or direct regulatory reporting
- Usage of standard messaging formats for external notifications
- Best infrastructure with usage of 'best of breed' rules engine, servers with secondary standby capacity. Scalable infrastructure to handle volume spikes and separation of databases by business services
- Business process performance monitoring through dashboard which includes measuring and generating management reports for assessing efficiency. Some key aspects considered include accuracy, throughput, time taken, outage and number of errors
- Framework services can be easily shared across multiple applications
- Modular approach to increases ease of addition of instrument types, reporting mechanisms
- Cater to increased business volumes
- Consolidated engine to handle all types of transaction reporting
- Centralization of business rules from a transaction reporting perspective
- Improved understanding of the whole reporting framework via a management console
More on MIFID
Peter Bennett, HCL's Principal, talks about the aspects of European Securities Services industry on which MiFID will have the greatest impact. It also discusses the key challenges envisaged in implementing MiFID requirements.