Market conformity check at BNY Mellon
Fully automated price control in accordance with KARBV
SIX Financial Information has implemented at The
Bank of New York Mellon SA/NV, Frankfurt am
Main branch, a solution to perform an automated
market conformity check in accordance with the
Capital Asset Accounting and Valuation Ordinance. Thanks to this price control service the depositary benefits not only from compliance with
current statutory requirements, but also from the
nearly complete automation of the process.
Challenge for depositaries
The Capital Asset Accounting and Valuation Ordinance (KARBV) entered into force on 22 July 2013
and replaces the previous Investment Accounting
and Valuation Ordinance (InvRBV). In accordance
with KARBV, depositaries must ensure that they execute their transactions only within the high-/low price
spread of the corresponding trading day. This is intended to ensure that a fund does not conduct any
transactions at prices either above the daily high or
below the daily low.
Price control service from SIX
The expanded requirements of KARBV posed a challenge for BNY Mellon, one of the world’s largest depositaries, namely how to efficiently fulfil the new
requirements to check all transactions for market conformity. When searching for a new solution, BNY Mellon selected the price control service of SIX Financial
Information.
The price control service from SIX makes possible a
daily price control of delivered prices against qualified high-low spreads for equities, funds, annuities,
bonds, currencies, derivatives and FX spots/forwards.
This market conformity check makes it clear whether
a transaction at the time of trading was in compliance with the current market conditions. As part of
the check, SIX also creates auditable control reports
that ensure the verifiability of the price-spread determination and the price check.
“The solution from SIX helps our bank to determine price spreads
and enables us to almost completely automate the market
conformity check“.
Lars Hella, Managing Director, The Bank of New York Mellon SA/NV
“For us it is important that the new solution fulfils all
of the statutory requirements of KARBV,” comments
Lars Hella, Managing Director at The Bank of New
York Mellon.
Added value for BNY Mellon
As part of the overall project, the price control service
of SIX was customized to meet the individual needs of
BNY Mellon and connected to XENTIS, the local fund
accounting system. In a second step, production went
live in IAS, the global accounting system.
With the price control service BNY Mellon now benefits from a nearly fully-automated solution to check
the market conformity of equities, bonds, certificates,
exchange-traded derivatives and forward currency
transactions. The daily delivery of the requirement file
is generated directly from XENTIS or IAS.
The price control service of SIX enables BNY Mellon
to reduce its manual processing effort and thereby
significantly decrease the costs of processing. At the
same time, the depositary was able to raise the ­qual­­ity
and transparency of its review process.
Benefits for the client:
– Legally compliant market conformity check in
accordance with KARBV
– Nearly complete automation of the process
– Reduction in manual processing effort and
corresponding costs
– Increase in the quality and transparency of the
review process
– Auditability through control reports to verify
price determination and price control
– Rapid and cost-effective integration into the
client’s own systems
Process start
Request preparation
Data determination
Applying the rules
Conclusion
client-system
provides the list of
instruments to SIX
(ASP service)
identifying the
Exchange traded
derivatives (ETD)
and mapping,
requirement of the
relevant market &
master data
determining the
price spreads for a
specific date across
1,200 sources of
prices for a
predefined time
classifying the price
data and determining the best-fit
source of prices in
accordance with
the class of security
providing ‘OK’ and
‘Not OK’ reports
and CSV-based
total results for
clients
Price control in five steps
07.14 / PDF only / DE
For more information, please contact your local SIX Financial Information office and a representative will be happy to assist you.
SIX Financial Information
Hardturmstrasse 201
P.O. Box
CH - 8021 Zurich
T+41 58 399 5111
Canada
+1 416 915 4121
Denmark +45 33 411 111
Finland
+358 207 334 043
Hong Kong +852 2971 0388
Ireland
+353 1 213 0722
Japan
Luxembourg
Norway Singapore
Sweden
+81 3 3808 2271
+352 261 161
+47 23 326 620
+65 6338 3808
+46 8 5861 6300
UK +44 20 7550 5000
USA +1 203 353 8100
[email protected]
www.six-financial-information.com