The document discusses the challenges and transformations facing capital market firms in derivatives post-trade processing, driven by regulatory reforms and the need for operational efficiencies. Firms are consolidating their clearing operations and adapting to increased client demands for margin efficiency and risk management, while also facing compliance burdens from regulations like Dodd-Frank and EMIR. Solutions from Genpact aim to streamline these processes through technology and shared services, enhancing operational effectiveness and addressing the complexities introduced by evolving market conditions.

1. Derivatives Post
Trade Processing
Capital market firms are making decisions on which business lines, asset classes
and services to keep and operate and which ones to exit. Regulatory reform and the
clearing mandate are driving the firms to consolidate their traditional exchangetraded derivatives (Futures and Options) and OTC derivatives into a single clearing
business, even while bi-lateral, uncleared derivatives will continue to co-exist with
cleared products. Clients in turn are demanding margin efficiencies, optimal use of
collateral and enhanced risk management services given the choice of execution styles
and clearing venues. The traditional exchange-traded FCM business is grappling with
reduced volumes and a more restrictive revenue model. Identifying bottlenecks and
improving operations efficiencies, consolidating into shared services and leveraging
industry utilities have become a necessity for many firms.
Markets are also evolving, with the derivatives exchanges
exploiting the difference in Initial Margin required for
exchange-traded derivatives and cleared OTC derivatives,
and creating OTC swap-like listed products -- the socalled “Futurization of swaps”.
Global OTC and Exchange-Traded Derivatives
Growth
Key Challenges
Consolidation of Platforms and Operations:
Post trade functions across business lines are replicated
both in terms of platforms and operations in in many Tier
1 and Tier 2 banks. With much of the OTC derivatives
business moving towards flow model and to central
clearing, the listed futures and the OTC derivatives
businesses look very similar. The current operating
model and costs for this post trade infrastructure does
not match the business need. Systems and operations

2. designed around bilateral trades need to be revamped
and this confirms, collateral management and margining
processes need to be re-engineered. Similarly, the futures
systems and processes need to be tuned to adapt these
complex products.
Client Onboarding, Entity Reference Data and
impact on Risk, Margining and Compliance:
With regulation pushing mandate of clearing, the
number of clearing relationships of firms has practically
doubled over the last year. As new counterparties
are brought in, the existing onboarding processes
are pushed to their limits. Also setting up the client/
account reference data and the legal entity hierarchies
and ensuring that all relevant information is pushed
to all the systems involved is even more critical. Not
addressing these issues impacts credit risk as well as
operational risk in terms of transaction failures.
Compliance and Regulatory Reporting:
The Dodd Frank Act in the U.S.A and the upcoming
EMIR regulations in Europe have put in an enormous
compliance burden on most investment banks. Almost
every operations procedure in middle and back office
needs to be reviewed and validated and in many cases
changed to support the new regulations. The amount of
record keeping and audit activities has mushroomed and
the regulation time lines have created a host of temporary
/ tactical solutions. The cost and complexity of compliance
is also impacting time to market for new products and
services. The mandate for CCP clearing is also a huge
impact on the derivatives post trade operations.
Our Solution
Moving towards a streamlined industrialized processing
service for derivatives is a multiyear strategy. The
Financial Markets Solution group at Genpact addresses
this through advisory services, specific point solutions
and end to end business function management
combining operations and technology.
Advisory Services
Readiness Assessment for Shared Service
Clearing Operations:
As increasing volume of derivatives transactions move
towards CCP Clearing and as some products morph
into futurized versions, creating a sustainable operations
model that can be supported under an extremely
challenged P&L is the key.
Determining which operations to bring together in to
a shared service, how would they operate, governance
model and even the service level agreements as well as
compliance requirements across business lines are the
basis of the operational effectiveness advisory services
that we offer. This cuts across both listed and OTC
derivatives post trade operations. The assessment will
deliver a detailed metric on current operations, a target
operation model and a transition plan to get to that
state with a supporting business case on dollars saved.
End to End Business Function
Management
Managed Services on Derivatives platforms:
When business was growing, banks across silos invested
in multiple trading and back office platforms resulting
in a very fragmented and duplicated infrastructure. As
we move to a consolidated clearing model it is very
clear that this needs platform consolidation. Genpact
brings in years of experience supporting many of the
industry leading derivatives platforms and provide a
managed service combining operations and application
technology/ platform support that can in the short
term drive down your operational costs allowing you
to implement your long term strategy. This managed
service includes legacy platform sun setting as well as
implementation of new platforms.
Point Solutions
TEEVRA
TEEVRA is the Middle Office Platform for Listed Derivatives
post-trade processing. It provides connectivity to Clearing
Houses (Gateways), performs real-time reconciliations
(Matching) & allocations and provides a trade repository
that can be the source for all transactional (orders and
trades) data in listed futures and options.
Key features:
• Real time processing of Listed futures and options
supporting
• Gateways to major Clearing Houses globally
• Real-time reconciliation between Clearing &
Execution messages
• Auto-allocation of Trades – internal (accounts) &
external (give-ups and take-ups)
• Unified Trade Repository – publish to Back office
systems, Compliance applications or other
downstream
Key benefits:
• Easy configuration and integration
• Standardized framework for repeatable
connectivity and scalability
• Flexibility to rapidly adopt to data format and
protocol changes
• Flexibility, efficiency and scale
• Achieve full STP – reduce cost of operations
• Available as components that can be independently
deployed and integrated into existing infrastructure
• Designed ground up for high throughput and
capacity
Margin Workbench
In the Derivatives division of an Investment Bank it has
always been very challenging for both client services

3. personnel and senior management to track Client margin
payment and monitor the associated financial risks. It is very
important for management to have a real-time view of the
risk rather than relying on day end reports/escalations.
Key benefits:
The Client Margin Workbench Tool will receive data
feeds from the standard systems (Position management,
Cash management, Security settlement, Margin
pay/receipt calculator) and integrate it to provide
a consolidated platform for client services/senior
management/CRM to manage and monitor margin
processing and settlement into one user friendly
environment.
• Ability to interface with payment system and link the
client calls with each payment status.
The tool will consolidate all margining related data into
one user friendly environment and provide users a realtime view on any margin activity and generate necessary
management/regulatory reports.
Key features:
• Real time Client margin status monitoring and
reporting tool supporting
• Workflow management within the operations group
• Client preference management
• Fails management
• Reporting
• Increased management control and transparency
• Easier management of client margin preferences
• Ability to track transactional history of a particular client
• Management reporting much more easier to generate
• Export facility enables download of report data into excel
Why Genpact?
Genpact- Headstrong combines people, process and
technology in delivering solutions for our clients, and
with our large number of clients across the global capital
markets spectrum, we have the scale required to provide
modular solutions that are right for each client’s business
needs.
Headstrong has been helping clients with the
operational and technological challenges associated
with the increasing costs , reducing margins , changing
regulatory and capital requirements in the traditional
derivatives business.
We have developed our solutions through a combination
of our deep domain expertise, technological savvy and
through continued partnership with our clients.
TEEVRA Middle Office Platform

4. About Genpact
For more information, contact:
Genpact Limited (NYSE: G), a global leader in business process
management and technology services, leverages the power of smarter
processes, smarter analytics and smarter technology to help its clients
drive intelligence across the enterprise. Genpact’s Smart Enterprise
Processes (SEPSM) framework, its unique science of process combined
with deep domain expertise in multiple industry verticals, leads to
superior business outcomes. Genpact’s Smart Decision Services deliver
valuable business insights to its clients through targeted analytics,
reengineering expertise, and advanced risk management. Making
technology more intelligent by embedding it with process and data
insights, Genpact also offers a wide variety of technology solutions for
better business outcomes.
Acky Kamdar
Senior Vice President
Financial Markets Solution
Acky.kamdar@genpact.com
For more information, visit www.genpact.com or www.headstrong.
com. Follow Genpact on Twitter, Facebook and LinkedIn.
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