Brown Brothers Harriman (BBH) announced today that it has introduced a solution for automating the receipt and processing of over-the-counter (OTC) swap transactions using Financial products Markup Language (FpML), allowing for straight-through processing (STP) of credit default swaps (CDS) and interest rate swaps (IRS). This is one of the first comprehensive automated solutions for OTC swaps in the industry.
As part of the solution, the trade is automatically captured and validated against FpML schemas and SWIFT rules as applicable, and an automated accounting entry is created. The scope includes contract creation, amendment, novation, and cancellation messages.
This solution, currently available to clients, represents part of a major initiative at BBH to help clients streamline and manage the rapidly growing volumes of derivative transactions in order to decrease operational risk and accommodate growth and possible volume spikes. Clients can transmit FpML messages to BBH via SWIFTNet or secure FTP connection.
"This breakthrough exemplifies BBH’s commitment to the future of the asset servicing industry,” stated Tim Connelly, partner and global head of BBH’s Innovation and Product Support division, “Our investment in OTC swap processing using FpML will yield efficiency gains for clients and ensure a more secure operational environment for OTC instruments."
BBH’s specialized Derivatives Group is actively involved in the industry, working to solve operational challenges associated with the derivatives market. BBH partners with many of the most sophisticated asset managers as they increase their investment in complex OTC derivatives. BBH offers a flexible, integrated, technology-driven platform for derivatives processing and administration allowing the firm and its clients to adapt to market changes and evolution.