WELCOME eGAINS Participants Transitioning to eGAINS Information Sessions.

transcript

WELCOME

eGAINS Participants

Transitioning to eGAINS

Information Sessions

Hosts: Futures Industry Association (FIA)

Clearing Corporation (CCorp)

Markit Group

Participants: eGAINS Users (London, New York, Chicago)

Presentation Schedule (via WebEx)

3:30 – 4:30 p.m. (London time)

I. Agreements: Transition EGUS to eGAINS (Thursday, April 3; Tuesday, April 8)

II. Trade Processing: Trade Flow, Layout, Reports (Thursday, April 10; Tuesday, April 15)

III. Banking: Billing Cycle and Money Flow (Thursday, April 17; Tuesday, April 22)

IV. Iterations: Implementation Feedback and Enhancements (Thursday, May 1)

On-Site Training Schedule – London

User training sessions shall be conducted in London June 9-13

Details regarding time and location to follow

I. Agreements PurposeTransition and Validate EGUS Agreements and Rates to eGAINS Fundamental Issue/QuestionHow does EGUS talk to eGAINS?

Agenda

Thursday, April 3Tuesday, April 8

3:30 – 4:30 p.m. (London time) •EGUS/eGAINS Agreement and Rate Uploads (FIA)o Electronico Manualo Participant Set-upo Rate Verificationo One-to-One Link: Agreement/Account

#/Rate•eGAINS Overview (FIA, Markit)o Role of Systems Providerso Participating Exchangeso Settlement Currencyo System Accesso Exhibit Review

•Data Mapping (CCorp)•Learning Environment Access (CCorp)•Testing Module (CCorp)o Trade Load

Auto Upload Manual

o Individualized•Testing: Phases 1-3 (CCorp)•Resource Links•Contacts

II. Trade Processing PurposeExamine Exchange Trade Flow, Data Layout and Position Posting and Report Generation Fundamental Issue/QuestionHow can I validate my trade data?

Agenda

3:30 – 4:30 p.m. (London time) •Exchange Trade Flow and System Requirements (CCorp)o Overview: How does eGAINS worko Trade Mapping Exchange Codes Product Codes Platform Transaction Source Codeso Deadlines (Agreement Changes and

Maintenance)•Record Layout–Output Review (CCorp)o Detailed Character Layout

•Month-End Cycle (FIA)•Trade Processing (FIA)o Rateso Position Reconciliationo Pay/Collect Reconciliation

•Outputs: Reports, T+1 and Month-end (CCorp)o Confirmation / Change Processingo On-lineo Data Files and Downloads

•Resource Links•Contacts

III. BankingPurposeReview Month-End Adjustments, Billing Cycle, and Money Flow Fundamental Issue/QuestionHow are pay/collects managed?

Agenda

3:30 – 4:30 p.m. (London time) •Participant Banking Instructions and Maintenance (FIA)•Banking Overview and System Functionality (FIA)o Confirmation of Banking Instructions

(mechanics and deadlines)o Changing Banking Instructions

•Month-End Processing Deadlines (FIA)•Third Party Billing•Reports (CCorp)•Managing Accruals (FIA)•Systems Testing (CCorp)•Resource Links•Help Desk•Contacts

IV. Next Iteration PurposeReview Implementation Feedback and Systems Enhancements Fundamental Issue/QuestionWhat is the next step?

Agenda

Thursday, May 1

3:30 – 4:30 p.m. (London time) •Feedback – A Formal Checkpointo Testingo Systemso Launch

•Review Participant Wish List•Procedure for adding (new) FX Settlements (FIA)•Other Exchange Participants (FIA)•Reducing the Credit Window (FIA)•Resource Links•Help Desk•Contacts

Housekeeping – Addendum to Initial Presentation (April 10)

• Within your firm, please appoint an eGAINS Training Contact and forward the details (firm name, training contact name, telephone number, email address) to David Adam (dadam@futuresindustry.org, 312.786.3821)

• In EGUS, Admin, Search Institution and Parties, Maintain Parties: Populate Exchange / Firm Code

Session 2. Trade Processing: Exchange Trade Flow, Data Layout, Position Posting and Report Generation

Purpose

Review Exchange (Eurex, ICE, Liffe) transmission of give-up trade data to eGAINS.

Fundamental Issue/Question

How can I validate my trade data?

Session 2. Trade Processing: Trade Posting and Validation

Agenda

• Exchange Trade Flow and System Requirements (CCorp)

– Overview: How does eGAINS work?

– Trade Mapping

• Exchange codes

• Product codes

• Platform

• Transaction source codes

– Deadlines (Agreement Changes and Maintenance)

• Record Layout – Output Review (CCorp)

– Detailed Character Layout

Session 2. Trade Processing: Trade Posting and Validation

Agenda Continued

• Month-End Cycle (FIA)

• Trade Processing (FIA)

– Rates

– Position reconciliation

– Pay/Collect reconciliation

• Outputs: Reports, T+1 and Month-end (CCorp)

– Confirmation / Change Processing

– On-line

– Data Files and downloads

• Resource Links

• Contacts

Exchange Trade Flow and System Requirements (FIA) Continued

Overview: How does eGAINS work?

Given a completed give-up agreement and rate schedule in EGUS, the eGAINS system shall:

• Obtain give-up agreement and rate from EGUS (daily download from EGUS to eGAINS).

• Receive the end-of-day give-up transaction file from the participating exchange(s).

• Look up the execution agreement, account, rate, and calculate the give-up transaction fees.

• Provide the participants T+1 reports and end-of-month preliminary and final reports.

• Allow participants to review trade details, modify transactions, resolve discrepancies, and confirm or reject trade changes.

• Complete the billing cycle, eGAINS automatically debits and credits the clearing and execution participants respectively.

At launch, eGAINS will support cleared futures and options give-up transactions executed on Eurex, ICE, and Liffe. Exchange product codes contained on the trade records are passed-thru to the eGAINS users. In the event of differences between commodity codes/ticker symbols/product designations, eGAINS defers to the Exchange code supplied on the trade record. eGAINS will support eleven currency types (at launch). These include: CHF, EUR, GBP, ISK, JPY, NOK, PLN, SEK, TRY, USD, and ZAR.

With respect to banking, FIA Tech is working with a global financial institution to process month-end settlements (i.e., transmit and receive give-up payments). Settlement accounts at the financial institution reside in London for non-USD payments and New York for USD payments.

eGAINS recognizes the following participant types: Executing Firm, Clearing Firm, and Third-Party. Since participating Exchanges agree to transmit give-up trade data only to the degree that the counterparties are eGAINS participants, please meet with your counterparties regarding eGAINS participation. Permission agreements, authorizing the Exchange to forward give-up trade data to eGAINS, must be completed in advance of eGAINS participation and filed with FIA Tech.

eGAINS Participant ID provides user access to view or update the trade records. eGAINS Participant IDs are based on exchange clearing relationships and the maximum number of IDs is contingent on the number of firm mnemonics at the exchange. For instance, if an institution has two clearing firm affiliates at a respective exchange, eGAINS may crate two user IDs. Even though eGAINS can create distinct IDs per relationship , it is not necessary to create an ID per relationship since the institution may want to group all trade activity under one ID - see below illustrations. Complete the eGAINS Participant – User Set-Up Information form to establish a firm profile. Contact FIA Tech with set-up questions.

Exchange Trade Flow and System Requirements (CCorp) Continued

Trade Mapping

CCorp worked closely (and continues to interface) with the Exchanges’ IT teams to receive test trade files, unpack the trade data and create templates for eGAINS data integration. Record layouts and field parameters have been defined and daily transmission of Exchange production data is scheduled for mid-May. Following May’s receipt of production data, CCorp shall distribute a detailed, full-scale testing schedule (Phases 1-3).

• Exchange Codes

Eurex: XEUR

ICE: ICE

Liffe: LIFFE

Exchange codes, received by the participating Exchanges, are synched to related EGUS designations and populated into eGAINS.

• Product Codes

The Exchanges use unique identifiers or strings of data to differentiate exchange, product, and class. This allows for standardization across trading systems, among service providers and with member firms. Communication therefore, with respect to product, is standardized and consistent.

Liffe, for instance, constructs product codes by combining a description of exchange, derivative or product type, and contract name. For example:

Currency Derivatives Product Code Designation: LFED and LOED

L= Market code for London Financial Exchange

F = Product type for futures (or O for Options product type)

ED = Product code for Eurodollar (i.e. the underlying asset the derivative is based on)

Conversely EGUS/eGAINS does not display product codes but rather product groups and their codes. CCorp is working with the Exchanges and Markit to synch codes where required.

• Platform

Multiple trading venues or platforms (i.e. Liffe’s BClear and Connect) contain identifiers on the Exchange’s trade records that are passed-thru to eGAINS. Therefore, for the sake of differentiating like products traded through different venues, eGAINS recognizes one exchange (as opposed to separating platforms into exchanges) with multiple platforms (characterizing BClear as a separate platform not exchange).

• Transaction (Trans) Source Codes

Method of execution, or transaction source (client or desk), is defined in EGUS. With respect to populating rates into EGUS as well as retaining the rates in the firm’s back-office, the specific cost of execution is known. That said however, it is not certain if the Exchanges are able to capture and pass-thru to eGAINS a method of execution indicator. Firms developed creative work-arounds (current practice) to distinguish method of execution (adding a character to the account number, i.e., tilde “~”) so as to reconcile exchange data to their books. Although functional, the work-around solution is not systematically practical for all participants.

CCorp is working closely with the Exchanges to create a similar logic stream so as to capture the

transaction source code on the trade record thereby foregoing the firms’ work-around. Upon completion, firms will need to identify the method of execution on the trade.

Deadlines (Agreement Changes and Maintenance)

At the end of the trade day, Exchanges transmit the daily give-up trade files to eGAINS. Agreement and rate changes effectuated in EGUS are expected to be applied same day to the eGAINS daily give-up trades received from the Exchanges.

CCorp is negotiating the cut-off time (i.e. 4 hours prior to start of the batch cycle; 4:00 p.m. given an 8:00 p.m. batch) for effectuating a same-day change to an EGUS agreement or rate. Further, work in process relative to establishing a schedule for updating the system intra-day (i.e. populate updates hourly).

Record Layout – Output Review (CCorp)

Detailed Character Layout

Agreement Details EGUS eGAINS

EGUS Agreement ID 15033166 15033166

Group ID 15033166 15033166

New or ChangeNew

Production or Test Prod

Customer Reference John Q. Customer John Q. Customer

Agreement Type Standard

Creation Date 4/01/2008

Approval Date 4/01/2008 4/01/2008

Update Date 4/01/2008

Effective Date 4/01/2008 4/01/2008

Bill Who Clearing Broker Bill Carry Participant

Profit Center 9400 9400

Record Layout – Output Review (CCorp) Continued

Parties EGUS eGAINS

Party Code 12345

Name ABC Securities

Type Clearing Broker Carry Participant

Exch Firm Code ABC LIFFE ABC

Accounts

Clearing Accounts L2400 L2400

Description London AG

Effective Date 4/01/2008

Executing Accounts 25001 25001

Record Layout – Output Review (CCorp) Continued

Tiers EGUS eGAINS

Fut/Opt/Both Fut/Opt/Both Fut/Opt/Both

Client Electronic .50 .50 contingent on exchange

Client Voice 1.00 1.00 and/or

Desk Electronic1.50 1.50 firm

Desk Voice 2.00 2.00 pass-thru trade indicator

Product

Code / Group ED ED

Trade Type all all

Spread Y/N Y Y

Rate Currency USD USD

Month-End Cycle Management (FIA)

Month-end processing deadlines include:

Business Day Activity/Deadline

1st Bus. Day Complete prior month trade processing

7th Bus. Day (8 p.m., EST) Deadline for executing firm to correct/adjust trades

15th Bus. Day (8 p.m., EST) Deadline for clearing firm to re-accept or reject trades

16th Bus. Day FIA Tech enters debits into banking system

17th Bus. Day Clearing firms’ accounts are debited; credit float begins

Last Bus. Day Deadline for firms to submit bank changes (names, locations, accounts)

60 Bus. Day from debitEnd of float period (variable)

Trade Processing (FIA)

Prior to launch, a detailed comprehensive review or parallel test will be conducted with production data. The test, conducted in three phases, will focus on rates, trades, and monies. Participants shall be advised of timing details and test scripts/scenarios when the schedule is finalized; ETA end of May.

• Rates

Q. How will rates I enter in EGUS appear in eGAINS?

A. On a nightly basis, eGAINS retrieves all agreement and rate information from EGUS. The rates and trade details are viewable online as it applies to executed give-up trades (Illustration 1 is a typical report capturing daily give-up trades for executing participants).

Trade Processing (FIA) Continued

Illustration 1: GNS00001, Daily Report for Executing Participant

GNS00001 CLEARING CORPORATION MM/DD/YY

GIVE UP AUTOMATED INVOICING SYSTEM (GAINS) HH24:MI:SS

TRADE DETAIL DAILY REPORT FOR EXECUTING PARTICIPANTS PAGE: No.

EXECUTING PARTICIPANT: XXXXX - XXXXXXXXXXXXXXXXXX

------------------------------------------------------------------------------------------------------------------------------

P O B S

TRADE EX CA CNTRCT STRIKE / / ORDER TRADE TR TR AGRMNT / G-U RATE G-U FEE T

DATE EX EX COM MON YR PRICE C C NUMBER PRICE SR TY NUMBER CUR QTY S A

------------------------------------------------------------------------------------------------------------------------------

CARRY PARTICIPANT ID: XXXXXX CARRY ACCOUNT: XXXXX CARRY DISPLAY ACCOUNT: XXXXXX EX ACCT: XXXXXX

MM/DD XX XX XXX XX XX XXXXX X X XXXXXXXXXXX XXXXXX XX XX XXXXXXXXXXX XXX XXX X XXXXXX.XXX XXXXXX.XX X

SUB TOTAL : XXXX XXXXXXX.XX

CARRY PARTICIPANT ID: XXXXXX CARRY ACCOUNT: XXXXX CARRY DISPLAY ACCOUNT: XXXXX EX ACCT: XXXXXX

Q. How does e-GAINS match rates on my trades?

A. Exchange trade data contains counterparty, account numbers, and commodity codes which are cross-referenced against eGAINS account and rate information (uploaded daily from EGUS and/or input direct into eGAINS by the user). In the event a match is not found, users will receive an exception report indicating "no match" or unlinked trade.

Q. Can you override a rate for a specific trade? For instance, on a one-off basis, I may choose to reduce my execution fee due to the size of the transaction.

A. No. Rates cannot be overridden however the total give-up fee or charge for the transaction may be modified. The change, initiated by the executing firm, shall appear on the daily and monthly give-up reports.

Q. Will I be able to identify which rates originated from EGUS agreements vs. which originated from non-EGUS agreements?

A. Yes. There is an indicator in the Rate Offload File for firms to identify EGUS rates from non-EGUS rates.

Q. What happens if I add or change an agreement in eGAINS that already exists in EGUS?

A. When the next EGUS agreement extract runs, the agreements/rates will be replaced with the corresponding EGUS agreement. The rate changes, added direct to eGAINS, will be lost. The best solution for managing rates is to modify EGUS.

• Position Reconciliation

Position match-off between the participant’s internal ledger (books) to eGAINS is the responsibility of the participant. eGAINS provides no position or rate reconciliation tool to facilitate an automated comparison. That said, firms are encouraged to manage eGAINS position details daily. In the event you seek to build an internal reconciliation tool, CCorp has defined the necessary record layouts and character parameters. Similarly, services are available for outsourcing the program and database construction (i.e. VVA Systems).

eGAINS trades are stored online for 45 days coinciding with the end of the monthly banking cycle. Markit however shall retain the historical files for recall.

• Pay/Collect Reconciliation

Pay/collect match-off between the participant’s internal ledger (books) to eGAINS is the responsibility of the participant. eGAINS provides no position or rate reconciliation tool to facilitate an automated comparison.

Q. Does FIA Tech manage eGAINS pays and collects?

A. Yes with respect to providing monthly pay/collect instructions to the banking correspondent. No, with respect to funds movement. The global financial institution processes the funds transfer(s) as instructed by FIA Tech.

Q. As an executing and clearing participant, will eGAINS net my pays and collects?

A. No. All payments are gross and viewed as unique and distinct transactions. Further, even though rates within the give-up agreement may be denominated in the same currency at multiple exchanges, clearing participants are debited on the 17 th business day and executing participants are credited on the 60th business day following the clearing firm debit. Hence the timing of pay/collects preclude netting.

Output: Reports (CCorp)

All end of trade day reports (available T+1) as well as month-end, reports shall be available for online viewing and downloading (ASCII text files). Reports are patterned after GAINS - therefore users, familiar with the former GAINS report (i.e. GNS00001) content and layout, ought be familiar with eGAINS report content and layout.

• Confirmation / Change Processing

In keeping with the monthly eGAINS Payment Schedule, trade record changes (the responsibility of the executing firm) must be complete by the 7th business day. The carry firm (carry firms have reject authority and rejects are typically done due to rate, account, adjustment, trade and/or payment discrepancy) must act on the change request by the 15 th business day. It is in the carrying firms best interest to monitor trade status changes (especially as the 7 th business day approaches). Changes are reflected in the preliminary monthly data files.

Output: Reports (CCorp) Continued

• On-line

eGAINS provides an interface to query and obtain trade status (reflects daily and month-to-date detail of trade activity).

• Data Files and Downloads

Users are provided eGAINS detail and summary reports recapping month-to-date executing and carrying firm give-up trades as well as month-end banking pay/collect details. eGAINS output and data files mirror GAINS. The following illustrations provide examples of give-up reports:

GNS00002: Trade Detail – Daily Report for Carry Participants

GNS00003: Trade Detail – End of Month Report for Executing Participants

GNS00002 CLEARING CORPORATION MM/DD/YY

TRADE DETAIL FOR THE DAILY REPORT FOR CARRY PARTICIPANTS PAGE: No.

CARRY PARTICIPANT: XXXXX - XXXXXXXXXXXXXXXXXX

------------------------------------------------------------------------------------------------------------------------------

P O B S

------------------------------------------------------------------------------------------------------------------------------

EXECUTING PARTICIPANT ID: XXXXXX EX. ACCOUNT: XXXXX CARRY DISPLAY ACCOUNT: XXXXXX CARRY ACCT: XXXXXX

TOTAL FOR EXECUTING PARTICIPANT : XXXXXX

TOTAL REVENUE : XXX

LESS REJECTED TRADES : XXX

NET REVENUE : XXX

COMBINED TOTAL REVENUE : XXX

LESS REJECTED TRADES : XXX

COMBINED TOTAL NET REVENUE : XXX

Output: Reports (CCorp) ContinuedGNS00003 CLEARING CORPORATION MM/DD/YY

TRADE DETAIL END OF MONTH REPORT FOR EXECUTING PARTICIPANTS PAGE: No.

EXECUTING PARTICIPANT: XXXXX - XXXXXXXXXXXXXXXXXX

------------------------------------------------------------------------------------------------------------------------------

P O B S

------------------------------------------------------------------------------------------------------------------------------

TOTALS FOR CARRY PARTICIPANT : XXXXXX

TOTAL REVENUE : XXX XXXX XXXXXXX.XX

LESS REJECTED TRADES : XXX XXXX XXXXXXX.XX

NET REVENUE : XXX XXXX XXXXXXX.XX

• COMBINED TOTAL REVENUE : XXX XXXX XXXXXXX.XX

• LESS REJECTED TRADES : XXX XXXX XXXXXXX.XX

• COMBINED TOTAL NET REVENUE : XXX XXXX XXXXXXX.XX

Resource Links

Information, agreements, links and resources will be distributed when complete. These include:

• Legal Agreement links

• Timelines

• Frequently Asked Questions (FAQs)

• Learning Environment link

• Spreadsheet for test trade submissions

• Data Layout Specifications

• Phase 1-3 Test Plans

• Report Types and Detail (45 Total)

Contacts

FIA Tech

Robert Drew, Consultant, 07812991191, rdrew@futuresindustry.org

David Adam, Consultant, 312.786.3821, dadam@futuresindustry.org

Ron Metcoff, Treasury Consultant, 215.272.6593, rmetcoff@futuresindustry.org

Krystal Atha, Relations Manager, 202.466.5460, katha@futuresindustry.org

David Wilson, Technology Project Manager, 202.466.5460, dwilson@futuresindustry.org

Mary Ann Burns, Executive Vice President Industry Relations, 202.466.5460, maburns@futuresindustry.org

Marc MacQuarrie, Client Services and Support, 312.786.5732, marc.macquarrie@clearingcorp.com

James Woods, Vice President, Production Management Group, 312.786.5715, james.woods@clearingcorp.com

Markit

Tony Murljacic, Director, Head of Trade Processing Connectivity, 917.441.6349, tony.murljacic@markit.com

Thank You for Attending

WELCOME eGAINS Participants Transitioning to eGAINS Information Sessions.

Documents