ENGAGEMENT SUMMARY
A leading global investment bank engaged BIP.Monticello Consulting Group to oversee the design, development, and implementation of new trade booking controls across their Global Markets Business. Specifically, BIP.Monticello was asked to implement a series of controls within the client’s trade booking control framework, including firm account validation and trader legal entity authorization.
Monticello was responsible for the end-to-end implementation of the project, including data analysis, requirements development, and full lifecycle project and stakeholder management.
CASE STUDY DETAIL
PROJECT BACKGROUND
Within the client’s trade booking control framework, the Individual Trader Mandate (ITM) defines trader booking authorizations across four dimensions:
1. Authorized Volcker Desks
2. Authorized Products
3. Authorized Legal Entities
4. Firm Account Ownership
To oversee authorization entitlements for global traders across multiple trade capture platforms, the client developed a control framework for ensuring trade bookings are duly authorized. Preventative trade controls validate trade bookings in real time against a series of predefined validation rules, using a centralized rules engine. The rules engine digests trade details and runs a series of validations to detect violations before the trade can be committed. Preventative control framework supports three types of trade violation blocks:
1. Hard Blocks prevent trade bookings unless the issue is remediated. Such blocks provide traders with violation detail and give them the opportunity to correct the errors before committing the trade.
2. Hard Blocks with Overrides prevent trades from processing. Trading supervisor can approve an override to permit the trade to proceed.
3. Soft Blocks, picked up in the second line detective controls, warn trade bookers to review the trade for a specific violation condition.
Detective controls identify post trade violations within minutes of trade booking. Such violations are picked up through the monitoring of a central data bus. They are fed into a workflow that routes the violation and underlying details to a queue for review and resolution.
During the resolution process, the business management teams research the issues and take appropriate actions to resolve and document the resolution as a condition of closeout. Each violation type has a Service Level Agreement (SLA), defining the required review and remediation timeframe before the issue is escalated. Additionally, serious booking violations can be escalated to a supervisor.
Metrics form both controls are reported along various dimensions. In cases where validations are not determinable, reference data issues are logged and routed to appropriate teams for investigation.
ENGAGEMENT OBJECTIVES:
This engagement involved multiple work streams to develop new Preventative and Detective booking controls related to firm accounts and legal entity validations. BIP. Monticello was responsible for conducting analysis, documenting requirements, and managing the technical implementation and operational adoption of the new controls.
Analysis:
· Prepared a business impact analysis of the new control framework
· Facilitated stakeholder buy-in required for control implementation
· Developed a legal entity authorization matrix across global entities
Requirements:
· Developed the business requirements for control integration across trade platforms, rules engines and reference data platforms
· Documented legal entity authorization requirements for the algorithm used to evaluate trader authorizations
· Created test plan, test scripts and acceptance criteria
· Developed desk procedures; and walked through control management
Project Management:
· Defined the integrated project plan across multiple functional and technical teams
· Hosted weekly working group calls to facilitate project communications
· Prepared project status and management reports
BUSINESS VALUE
BIP. Monticello partnered with client’s Business, Compliance and Technology teams to implement enhancements to our client’s end-to-end booking control framework. By leveraging our expertise in data analytics, trading operations, and project management. BIP. Monticello played a critical role in successfully delivering a technological solution, helping our client meet regulatory commitments for operational risk reduction to the trade booking processes.
