The Dodd-Frank Software Solution

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WG Consulting and ZE PowerGroup, an award winning data collection, monitoring and visualization firm, have partnered to build and deliver a comprehensive Dodd-Frank software solution to fit the current and upcoming challenges faced by Non-Swap Dealers (non-SD), Swap Dealers (SDs), Major Swap Participants (MSPs) and End-Users. With ZE PowerGroup’s award winning Data Management capabilities and WGC’s deep understanding of compliance requirements, we have built a data retrieving and reporting system, unique to the requirements of the Dodd-Frank Act.

Many of the solutions required for Dodd-Frank compliance require the collection and centralization of data; reporting and mapping of data; and finally the publication of that data to the CFTC, ICE Trade Vault or DTCC on a specific schedule and with the ability to monitor for errors and resend files, if needed. The ZEMA Dodd-Frank software solution can handle all of those challenges with award winning capabilities.

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The Dodd-Frank Software Solution

  1. 1. WG Consulting & ZE PowerGroup Dodd-Frank Reporting Solution www.wgconsulting.com
  2. 2. Table of Contents Introduction Timeline and Issues Our Solution Example Screens Contact Information Page 2
  3. 3. Introduction WG Consulting and ZE Power Group have formed an exclusive partnership to build a DoddFrank solution to provide client answers to their current challenges. WG Consulting WG Consulting (WG) utilizes world-class methodologies to deliver value-creating solutions based on each client’s unique operating needs. Our team’s thorough understanding of operational and regulatory risk is the key to competitive results that mitigate such risks for our valued clients. ZE PowerGroup ZE PowerGroup Inc. (ZE) is a software development company with extensive energy experience. ZE is the developer of the award winning ZEMA Suite an end to end data management system that focuses on data aggregation, data presentation and analysis, distribution and systems integration. ZE was founded in 1995 and has been providing services to market participants for 17 years. Page 3
  4. 4. CFTC Timeline – Decision Points (non-SD) Potential finalized projected compliance dates for non-Swap Dealers April 2012 June 2012 August 2012 November 2012 February 2013 Swap entity definitions finalized Swap product definition anticipated to be finalized Spot month position limits Real Time reporting and record-keeping/reporting for interest rate and credit swaps Real time reporting and record-keeping/reporting for equities, and other commodities (effective: July 23, 2012) Assessment Q2 2012 Q3 2012 Implement Selection Assess Selection Q4 2012 Q1 2013 Implementation 4/18/12 Swap entity definitions finalized by CFTC/SEC (rule effective July 23, 2012) 6/30/12 Swap product definitions anticipated to be finalized, per Commioner O’Malia’s proposed schedule as published on CFTC website 8/29/12 Spot month position limits in effect (60 days after publication of product definitions) 11/27/12 2/25/13 As of February 2013 Real time reporting and recordkeeping/reporting for non-Swap Dealers – Interest Rates and Credit (150 days after publication of product definitions) Real time reporting and recordkeeping/reporting for non-Swap Dealers – Equities, FX and other commodities (240 days after publication of product definitions) Page 4
  5. 5. CFTC Timeline – Decision Points (Swap Dealers) Potential finalized projected compliance dates for Swap Dealers April 2012 June 2012 August 2012 November 2012 Swap entity definitions finalized (effective: July 23, 2012) • Spot month position limits • Real time reporting for Interest Rates and Credit • Swap product definition anticipated to be finalized • Internal Business Conduct Real Time reporting and record-keeping/reporting for equities, FX and other comm. • Large Trader reporting for cleared swaps February 2013 Real time reporting and record-keeping/reporting for equities, and other commodities Assessment Q2 2012 Q3 2012 Q4 2012 Selection Implementation August 2012 October 2012 Large Trader Reporting Assess July 2012 Provisional registration for SDs External Business Conduct 4/18/12 Swap entity definitions finalized by CFTC/SEC (rule effective July 23, 2012) 6/30/12 Swap product definitions anticipated to be finalized, per Commioner O’Malia’s proposed schedule as published on CFTC website 8/29/12 Implement Selection Q1 2013 11/27/12 As of February 2013 - Spot month position limits in effect (60 days after publication of product definitions) - Real time reporting and recordkeeping/reporting for Swap Dealers – Interest Rates and Credit (60 days after publication of product definitions) - Internal Business Conduct (except for Business Continuity & Disaster Recovery Plan) Real time reporting and recordkeeping/reporting for non-Swap Dealers – Interest Rates and Credit (150 days after publication of product definitions) Page 5
  6. 6. Dodd-Frank Issues The Dodd-Frank regulations create a unique system and business issue for organizations that will require a system with capabilities around: Collection & Centralization • • • Multiple sources: Ability to pull from multiple ETRM systems and spreadsheets Customization: Ever changing regulations require new fields and reports to be created Datawarehouse: Stored data in a standard database As of February 2013 Reporting & Mapping • • Normalization of data: Transformation of each data source to go into single datawarehouse Publication • Communication with the following entities: • • ICE Trade Vault • Create report Formats: CSV, FpML, XML, FIXML CFTC DTCC • Error Handling: Ability to perform action based on data translation issues • Scheduling: Action set to occur based on specific time • Internal Reports: Viewable screen to show history of reports submitted • Error Handling: Ability to perform action based on communication issues Page 6
  7. 7. High Level Solution Overview Data is automatically imported from Allegro and Endur. DF Database Data is centrally stored into the ZEMA DF database. Collection Centralization Data stored in the database can be reported on, visualized and manipulated. Transformed data issued back to the system. Data is mapped to target destinations. Mapping Fixed format files are issues to CFTC secured locations. As of February 2013 Reporting Publication Page 7
  8. 8. Checklist Comparison The Dodd-Frank solution will require a combination of SME consultants and a proven systems solution that WG and ZE can provide. Solution Features Regulatory Reporting (LTR, Real-Time, Recordkeeping) Data warehouse (Schemas for Counterparty, Static and Transactional Data) Connectivity to all Swap Data Repositories Connectivity to CFTC Connectivity to Swap Execution Facilities Form Reporting (102S, 404A/S) Internal Reporting (Audit, compliance and IT) Validation (Rules and Notification capabilities) Monitoring Ongoing Support As of February 2013 Other ETRM Systems In-House           ZEMA       Page 8
  9. 9. Benefits Overview The WG and ZE Dodd-Frank solution provide the following key benefits that we believe set us apart. Benefits • Ability to leverage the best skills from both a services provider and a software development firm who have global success and presence • Low delivery risk • Faster time to market • Cost certainty • Left with a scalable and expandable software system As of February 2013 Page 9
  10. 10. ELTP Through ZEMA ZEMA as a software package has a framework and existing components that is applicable to Dodd Frank. The ETLP (extract, transform, load, publish) process is capable of importing transactions from any number of sources and publishing to any number of SDRs or reporting bodies. Data Manager Sources (C/ETRM) As of February 2013 Extract (processors) Market Analyzer Transform/Load Curve Manager (work flow) Publish (adaptors) Sinks (SDRs) Page 10
  11. 11. ZEMA Demo Workflow Manually executing an event driven process Import Openlink table from one database to another As of February 2013 Transform Openlink table to FPML Post to secure FTP Write values back to database and to file store Page 11
  12. 12. Collection and Centralization Collection and Centralization • Source Data • • 1a. Allegro (MS SQL) 1b. Endur (Oracle) Ability to pull information from multiple ETRM systems (ex. Endur, Allegro, etc) • Screen shot Ability to pull data from spreadsheets or other electronic sources Data Warehouse • Dodd-Frank data warehouse solution covers the following table structures: Reports, Party, Static, and ETL connections • 2. Data Warehouse Data warehouse here is flexible and scalable for new regulations and will fulfill future compliance needs and organizational needs As of February 2013 Page 12
  13. 13. Centralization – Cont. Centralization • Validation • Simple ability to create standard validation rules (ex. count, correctness, etc) 1. Easily transform data values Ability to validate and transform data before inserting into the data warehouse • Screen shot • Viewable screen to track submitted records and their validation status • Simple screen to manually enter changes • Setup Email notifications on validation errors 2. Create new Validation conditions As of February 2013 3. Validation Report Page 13
  14. 14. Mapping – Classification Mapping • Classification of data • Customer data mapping is automatically generated when pulling data from source system (ex. LEI Code, 102S ID, Market Designation) 1. Static data mapping Static data mapping is automatically generated when pulling data from source system (ex. Underlying Commodity Code (UCC), Commodity Reference Price (CRP)) • Screen shot • 2. Customer data mapping Easy to setup mappings for DoddFrank rules As of February 2013 Page 14
  15. 15. Reporting – Scalability Reporting • Screen shot View and visualization data • Ability to setup new data sources to allow business growth and expansion • Ability to add new fields to reports based on new or changes to the requirements • Ability to add new observations around pulling data from sources • Dedicated team of software developers and Dodd-Frank consultants, which will update software based on new and changing regulations As of February 2013 Page 15
  16. 16. Publication – Monitoring Monitoring • Monitoring (Internal) • Listeners can be configured to operate at various time intervals • • 1. Screen to Monitor Status of listeners Ability to setup listeners that will monitor changes to a source system and automatically move data to the datawarehouse • Screen shot 2. Ability to schedule and create Email Notifications when monitor fails For Real-time reports, the listeners can be configured to gather, transform and submit data to the proper entities near real-time Monitoring (External) • Ability to monitor responses from external entities As of February 2013 Page 16
  17. 17. Publication Messaging • Messaging • Tasks are easily configured to create FpML messages and store data into a appropriate directories • Viewable screen to show when messages were sent, status and history 1. Easy setup of credentials between databases and external entities Workflows can be scheduled to work in during various times • Screen shot • 2. Files sent to CFTC via sFTP Simple Screens that will allow user to setup communication credentials between entities (ex. sFTP, ICE Trade Vault, and MQ Gateway) FpML test file loaded up to CFTC As of February 2013 Page 17
  18. 18. Let’s Stay In Touch David Stephan Managing Director, Risk, Systems & Compliance DStephan@wgconsulting.com O: 832.581.4971 C: 832.863.6659 Dan Masch Director, Regulatory Compliance DMasch@wgconsulting.com C: 832.863.6659 James Yu Managing Director, Trading & Risk Management JYu@wgconsulting.com C: 832.603.1572 Waleed El-Ramly Sukh Grewal Waleed@ze.com O: 604-306-4393 Sukh@ze.com O: 604-244-1475 For more information, email letstalk@wgconsulting.com www.wgconsulting.com WG Consulting, LLC @thewgcpromise WG Consulting WG Consulting 1415 Louisiana, Suite 3450 Houston, TX 77002 Page 18

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