Peresys offers an end-to-end software solution for the Securities Lending Trade Cycle

Click here to download the PDF version of this advert.

Peresys was established in 1996. Its original mission was to become the leading provider of specialised information technology solutions to the South African financial services industry. Today, Peresys can count many of the leading buy and sell side Financial Market participants as long standing clients, and with a team of highly skilled and experienced individuals, is ideally positioned to continue delivering affordable, world class solutions and services to its existing and new customers globally.

Peresys' initial focus was to automate the Equities trading cycle from order initiation to settlement, and did so successfully through a combination of order management, integration, messaging, and trading applications and services. Today, more JSE Securities Exchange members and tier one asset managers in South Africa use Peresys for their equity trading and STP requirements than any other vendor.

Over the past eight years, through a combination of organic growth and acquisition, Peresys has built up a suite of software solutions that spans the full spectrum of listed financial instruments, and the entire trade cycle:

Exchange Solutions - The Bond Exchange of South Africa selected Peresys as its solution partner and offers its membership trade capture, matching, and price discovery through Peresys developed technology that is state of the art and FIX protocol compliant.

Sell-Side Trading - Peresys' Hermes suite of order management, trading, and decision support applications is used by more equity traders on the JSE Securities Exchange than any other product. Hermes interfaces into the JSE SETS matching engine and is FIX enabled to facilitate buy side order routing and Direct Market Access.

Buy Side STP solutions - Three of the five largest South African fund managers and two European institutions make use of Peresys' Integration team to automate their internal pre and post trade process.

Decision Support and Portfolio Management - More South African private client portfolios are managed with the aid of Peresys systems than any other, from modeling to order creation to fee calculation. Additionally, Peresys has developed bespoke decision support solutions for tier one fund managers.

Information Management - Having been among the first solution providers globally to adopt the RiXML research dissemination standard, Peresys is actively involved in promoting and delivering RiXML based solutions in South Africa and abroad. Peresys is a member of RiXML.org.

Pre and Post Trade Messaging (Business Process Network) - The Peresys BPN is the only South African based network offering the full spectrum of messages from Indications of Interest to Contract Notes, making use of the FIX Protocol.

Through its partnership with leading FIX Engine provider, Cameron Systems, Peresys offers its BPN customers the option of an Outsourced FIX Engine to minimize the investment needed to become FIX enabled.

Peresys also offers a fully redundant FIX Hub solution with the option of a transformation service to deal with differing versions and nuances of FIX.

Today the Peresys BPN is the network of choice for Order Routing and DMA between South African trading participants, and through network connectivity agreements with Radianz, Thomson Autex, TNS and Reuters, is playing a leading role in increasing deal flow into South Africa from Europe, the US, and Asia. Peresys is a member of FIX Protocol.Org

Securities Lending and Borrowing Solutions from Peresys

Peresys' SLAMS product is the most widely used system of its kind in South Africa, counting major international and local lending and borrowing players among its clients.

SLAMS is the core administration system, and is shipped together with integration modules or toolkits that interface with the applicable equities exchange, clearing and settlement systems. These interfaces consist of both front-end import/export options as well as fully automated event driven SLB SWIFT messaging. In addition, Peresys offers bespoke integration solutions catering for the need to update internal and external accounting and risk evaluation systems together with client specific proprietary functionality development. Other technologies such as Peresys' SLB Portal and Community Server have been developed to facilitate and streamline the pre and post trade business flows in the SLB trade cycle.

One of the premier South African investment banks, Rand Merchant Bank's Securities Lending Division recently completed its migration to the Peresys SLAMS system. Head of RMB's Securities Lending Division, Ryan Proudfoot said, "We identified the need for a system that was capable of meeting our ongoing functional requirements, and that would differentiate ourselves from the rest of the market. Peresys's SLAMS system has been able to meet these requirements. I am also pleased to say that the migration, including all historical data off our previous system, proceeded smoothly with minimal disruption to our client base."

A functionally rich application with a proven track record of development spanning more than six years, SLAMS has recently seen considerable growth in its South African client base, which previously has been the domain of international solution providers. The perception now is that SLAMS is ready to compete on a global level.

Peresys' SLB solution flow

Core Lending and Borrowing Administration

The SLAMS system caters for both principal as well as agency type SLB transactions. These transactions may have originated from exclusive lending arrangements, pure agency business or agency relationships for stock broking clients. The deal process flow of capture, authorisation, confirmation and settlement is segregated and the authorisation of individual deals is an optional function in the system for security purposes to ensure that the user who inputs the initial trade is different to the person who authorises it.

Some of the salient features of the system are:

Compliance and loan approval functionality - this includes deal value limits, approved instrument restrictions, total loan and collateral limits and restrictions based on a percentage of equity market capitalisation. Additionally the Collateral Manager compares the value of existing collateral against the values of loans thus determining on demand or periodic top-up and return requirements.
Collateral Management - SLAMS can accommodate listed securities, unlisted securities and cash as a means of managing collateral with a facility to maintain approved collateral instruments. It provides for the calculation and processing of collateral on a per-deal or per-pool basis based on an indicator set for each counterparty. Margins are based on default percentages and can be overwritten at the point of processing. Exposure calculations are available via various user defined position reports.
Reserve and Pool processing - SLAMS can cater for the need to place stock on reserve and also offers Pay-to-Hold functionality. It enables lenders to allocate loans to pools of securities available to be lent, with fee reporting functionality allowing for the calculation of fees, specific to each pool.
Settlement messaging - is geared for the delivery of securities from independent safe custody accounts. External counterparty availability is managed via the Peresys web based SLB Portal (see below).
Returns - can be processed against the original loan or against other loans as a consequence of an early return, or an early recall. Comprehensive Ageing Reports can be utilised in determining age of deals and if any deals are approaching user defined limits.
Instrument and Price Feeds - a user can set up new Equity, Fixed Interest, and Money Market instruments. The system is capable of accepting feeds containing daily instrument and price data for automatic updates of current and storage of historical data. In addition, a user can maintain prices of unlisted instruments manually. Peresys has also provided solutions that integrate into internal client specific price feeds.
Corporate events - a data feed can be imported. Alternatively, users are able to capture salient corporate event details manually. The effect of corporate events on client's positions can be processed with minimal user intervention via the Daily Corporate Action processing functionality. The system alerts users to pending corporate actions that require processing. Corporate Action Advices and Notification Reports per client are also available.
Base currency - is user defined. Any previously created currency can be used as a base. Additionally SLAMS has the ability to process foreign currency as collateral and to record securities lent or borrowed in a user-defined currency.
Reporting - the system can produce trade confirmations and booking advices in paper format with email or fax capabilities from the system. This also applies to other hard copy reports. Should a trade be amended, a new contract note can be generated with the amended details.
Fees and Interest Calculations - is a powerful function ranging from multiple fee types and interest codes to payments modules and detailed reports. The export of monthly fees and interest into the Payments Module has the effect of raising an accrual. Thereafter payments/receipts are captured against the amount due or payable. Reports are then available to reflect Due, Received and Balances outstanding.
Integration - bespoke solutions have been designed for end-to-end processing or via an export to a user defined data layer with external accounting systems and general ledgers.
User Access Security - Windows or SQL authentication can be used as a means of gaining access to the system and information contained in the underlying database. An appointed Systems Administrator, controls system settings to categorise users according to their task specific functions e.g. Front Office Users can be prevented from gaining access to settlement functionality and contract note generation but have access to all system reports. Back Office Users will be able to settle trades and generate confirmations whilst not having access to deal capture functionality. The system can create Audit type users with Read Only Access and users can be restricted access to certain functionality by way of a System Options "Deny" screen.
Look and feel - SLAMS allows for the various roles within an organisation to focus on functionality that is key to their specific area of activity. Respective users can manipulate screen layout and functionality displays. Quick Entry screens allow lender and borrower legs to be processed simultaneously.
System alerts - The system offers both built-in alerts and warnings and customisable messages to users. System validation functionality constantly monitors for various conditions and then provides specific references to allow for rectification by users. SLAMS also provide comprehensive error messages at the point of erroneous capture or conflict processing. User defined message types allow customised actions to be suggested once a particular event has occurred. A user can Insert or Edit these messages.

The HSBC Group, one of the largest banking and financial services organisations in the world, has recently implemented SLAMS across its South African branch's lending desk. According to Yvonne Mohammed, assistant manager, Securities Lending, "HSBC in South Africa, have found SLAMS to be a very robust system which is at the forefront in terms of interfaces, functionality and reporting. Furthermore our change to SLAMS was made easier by the support we received from Peresys in terms of minor changes and new requirements specific to HSBC."

Securities Lending & Borrowing (SLB) Portal

The Peresys SLB Portal is a web-based tool that has been developed to streamline the securities lending and borrowing process.

In essence the Portal allows borrowers and lenders to negotiate and conclude a securities lending transaction online. The solution offers a hosted database and site together with a secure environment, via certification and an electronic mandate matching procedure.

After the initial registration and setup process, lenders have the ability to publish particulars of securities available for lending. This data can be exported directly from the core SLAMS system. Borrowers also have the ability to publish their borrowing requirements. Thereafter, either party can commence the negotiation process (bids and offers) until the particulars of the loan are confirmed from both ends. Concluded deals can then be imported into SLAMS.

SLB Analysis Solution

The SLB Analysis Solution automates the manual process of determining daily securities borrowing and related collateral requirements, based on SLAMS positions and the holdings and trades recorded on the Johannesburg Securities Exchange's (JSE) administration system. Users have the ability to accurately identify short sale transactions and whether "held" shares are available in related client accounts. This in turn provides assurance that securities borrowing and related collateral requirements are valid and accurate. Additionally there is accuracy in determining the extent of loan and collateral returns. With this solution administrative effort and time associated with the securities lending process is greatly reduced and penalties resulting from non-compliance to short sales and associated cover regulations are limited.

Settlement Messaging Solutions

The SLAMS - Settlement Integration Modules allow for straight through processing of settlement message information between SLAMS and various South African settlement systems such as the South African Financial Instruments Real-time Electronic Settlement (SAFIRES) system's front-end (SAFE). Additionally, Peresys offers a fully automated and scheduled SWIFT messaging solution that passes SLB messages directly into the STRATE (Share Transactions Totally Electronic) environment. Benefits of these solutions include the elimination of time and effort required in the recapture of SLB deals within the SAFE front-end and a reduction of settlement costs associated with securities lending transactions. Furthermore, the single point of capture for instructions reduces the potential for human error and caters for the automatic update of a loan's settlement status within SLAMS.

According to Ashley Slamat, RMB's Project Leader on implementation, "By acquiring SLAMS we have been able to integrate our lending process as well as enjoy additional functionality which was not available in the previous system. A solution was also provided by Peresys, which enables us to communicate effectively with the local settlement authority, STRATE, using SWIFT."

Community Server

The Community Server functionality within the SLB solution set allows for members within the SLAMS community to share loan transaction and other reconciliation information such as fees, interest and positions. This allows for a considerable reduction in month-end administration and the manual daily trade confirmation process.

The Community Server is a web service hosted by Peresys. When registering with the Community Server, the SLAMS site in question and respective users are assigned secure identity codes. Other sites, in the process of creating counterparty defaults, request the respective identity code from the community server. After the registration and linking process is complete all client reports that are generated for a single counterparty can be published to the Community Server.

The reconciliation process involves one party publishing to the Community Server and the other party accessing the server, downloading the report and executing the reconciliation. This execution process generates the equivalent reports and compares the data contained within the report and provides information on exceptions.

Contacts

For more information on Peresys' SLB Solutions and other product offerings visit www.peresys.co.za or contact:

David Harty
direct: +27 21 657 8805
cell: +27 82 388 6922
mail: dave@peresys.co.za