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Emerging Markets IT Lehman Integration Presentation

Emerging Markets IT Lehman Integration Presentation. 14 th November, 2008. Executive Summary .

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Emerging Markets IT Lehman Integration Presentation

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  1. Emerging Markets ITLehman Integration Presentation 14th November, 2008

  2. Executive Summary • The Lehman’s System Integration within Global Credit, the short-term strategy (“Day 2”) will commence with the roll out for Flow Credit products on 8th December. Over time products will be migrated from SDAPS to Lehman Dynamix until the Day 3 end state is reached. • Changes of strategic relevance to Emerging Markets are as follows : • Cash Credit Trading. New York migration to the CATS database, with Barclays eTrading and feeds remaining as is. There are no changes in London and Singapore. • Credit Derivatives. There is a global migration to Lehman ICE analytics platform, Trade Blotter and Sales front end Systems. The SDAPS database and feeds remain as is. • As a result of the above, IT Gap analysis is required in the following areas : • Cash Credit Trading. New York/LATAM product gaps to be analysed. Note – Pravin Mouli has requested an analysis of all EM Bond analytics. • Credit Derivatives. Functional gaps need to be analysed re : EM Risk. • EM Analytics – Functional and Methodology gaps. • Products not covered (Day2 will not introduce any new products eg. CLNs) • Recommended Strategic options : • Follow GCDIT for Day 2 integration. Make EM System changes for “Day2” to address the methodology and product gaps. There is a cost involved in adopting a new pricing engine, this needs to be considered in the context of the gap; gap being assessed currently. • Do not follow GCDIT for Day 2 integration. No EM System changes for “Day2”, recognising that there are methodology and product gaps. Since the Day 2 roll out is phased, if we delay the changes there will be an opportunity cost, should we wish to use GCDIT Systems in the future.

  3. Cash Credit - Assessment • CATS - Cash Credit • Benefits of Lehman Integration : • With ICE, New York/LATAM will have a single analytics platform and pricing engine for both Cash Credit and Credit Derivatives in EOD. • Additional product support and market connectivity. • Enhanced STP processes, reduces operational loss. • Bloomberg licensing fees saved in migrating from TOMS to CATS. • Costs of Lehman Integration : • EM Bonds and EM Currencies may not be supported. Gap analysis and development required. • Functionality may need enhancing to handle EM market specific conventions. • Lehman ICE is cross-product and hence may require EM development to ensure full coverage. • Analytics mismatch between TOMS (London), CDT and CATS in short-term. • Maintenance of both TOMS (London), CDT and CATS in short-term. • Training. Users to adopt new Systems. • Strategic Options : • (1.) Business decision required to follow GCDIT. Would need to migrate from TOMS to CATS in New York. • (2.) Retain existing EM Systems ‘as is’. Delay business decision to adopt GCDIT solution for Day3. TOMS licensing fee is a significant cost.

  4. Credit Derivatives - Assessment • Trading and Analytics - Credit Derivatives • Benefits of Lehman Integration : • With ICE, New York/LATAM will have a single Intraday/EOD analytics platform and pricing engine for both Cash Credit and Credit Derivatives. • Agile software reduces time to market for new products. • Fully Integrated Trading and Sales Blotter capability provided. • Trade event handling comprehensively supported within Dynamix. • Costs of Lehman Integration : • EOD pricing. Lehman ICE is cross-product and hence may require EM development to ensure full coverage. • Trade capture. Functional gaps for EM products/specific market conventions. • Training. Users to adopt new Systems. • Strategic options : • (1.) Business decision required to follow GCDIT. Following GCDIT is desirable since Barclays ODC trade capture platform will no longer be supported. • (2.) Option of retaining existing systems is not feasible.

  5. Roadmap – Emerging Markets • (1.) Business decision to go with GCDIT Day2 Integration plan, or not. • (2.) Determine methodology and functionality gaps, specify related development activities and prioritise for delivery. • (3.) Formulate EM delivery strategy. • (4.) Longer-term EM strategy including GCDIT Day3 proposals.

  6. Appendix I : Current environment – Emerging Markets

  7. Appendix II : Target environment – Global Credit

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