dah sing dcd sales solution
TRANSCRIPT
Dah Sing BankWealth Management Sales SolutionFunctional Overview and Commercial Proposal
04/12/2023 2
Agenda
• Project Objectives• Current Challenge and Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional extension• Project Steps
04/12/2023 3
Agenda
• Project Objectives• Current Challenge and Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 4
Project Objectives
Be the sole price provider of DCDs
Dah Sing RM will only offer DCD with embedded Dah Sing options and rates
Eliminate counterparties and offer better rates
Taking the vanilla leg into Dah Sing’s trader book
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 6
Current Challenges and Business Impact
Current Challenges
Dah Sing does not have the technical infrastructure to becoming the sole distributor and price provider of DCD
Business Impact
Without the infrastructure Dah Sing will have to rely on outside counterparties rates
Less margin, loss of new revenue
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 8
Solution Requirements
Core functionalitiesGive RM a simple interface for pricing DCD as well as other sales support tools
The interface should allow RM to generate Dah Sing branded term sheets
Allow Dah Sing traders to control DCD prices and vanilla spread
Enable traders to upload their own market data & funding rates
Allow RM to electronically request quotes from Dah Sing traders
Enable straight through processing to downstream systems
04/12/2023 9
Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 10
SuperDerivatives Solution
FX Option Traders
Will be able to define catalog of products (DCD) in SD
Build custom pricing interface for RM
Define Dah Sing’s DCD Note Term Sheets and distribute to RM
Upload their own rates and control the vol/spread quoted to RM
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SuperDerivatives Solution
Relationship Managers
A customized pricing interface for DCD
Pricing based on Dah Sing traders’ rate
Save/Open past quotes
Generate Term Sheets (Pre-designed by Treasury)
Deal capture successful deals
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SuperDerivatives Solution
Request for Quote
RM can request quote via their interface
Traders receives incoming RFQ on their SD platform and respond with a quote
If deal is under a certain amount, RM can execute & capture on their own
If amount exceeds the threshold, RM will send RFQ to traders
Enforced as part of the deal approval process
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SuperDerivatives Solution
Integration with Dah Sing’s current systems
Successful trades are captured by RM into SD
SD electronically sends deal details to Dah Sing’s designated internal systems
Dah Sing needs to decide how information will flow between SD and Dah Sing internally
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SD Solution Workflow
RM / Sales Client
Trader
Request DCD
• Check SD for indicative price• Generate Term Sheet for Client• Deal Capture Trade after Client’s approval• Send RFQ for high notional deals
RFQ Quote
• Design and distribute RM interface • Use SD full pricing and tools for different
currency pairs and option classes• Upload and Adjust DCD Rates
Fenics & Kondor+
Deal Capture
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 16
Key Considerations
Dah Sing needs to decide how information flow between the front and middle office risk systemOption 1: Send the option leg to Fenics and deposit to internal systemOption 2: Send both deposit and the option to Fenics. Fenics in turn forward details to Kondor+ and other internal systemsOption 3: Send the option leg to Kondor+ and the deposit to another internal system, and in parallel send only the option legs to Fenics
Dah Sing traders needs to consider the rates to feed into SuperDerivatives
Pricing needs to be consistent with Fencis Risk Management
Alternative: Replace Fenics with RMX (Optional extension)
Project Time Frame
When does Dah Sing expect the solution to be in full production?
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 18
SuperDerivatives Solution’s Benefits
A dedicated distribution and booking infrastructure for Dah Sing
Covered all aspects of sales and distribution of DCDs
DCD pricing and sales tools for RM
Rates and market data control for traders
RFQ between sales and trading
Straight through processing to Fenics, Kondor+ and other internal systems
Fast time to market
Web-based with minor integration work
Some components ready for production from contract execution
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SuperDerivatives Solution’s Benefits
Free upgrades & maintenance
Performed weekly during off market hours (Sunday)
Past Experience
Successful project with interest rates operations
Proven market accuracy and technical competency
Delivered similar distribution solution for DCD in Europe
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 21
Commercial ProposalUp to 2 licenses of SDX-FX
• For treasury FX option traders
• Customize RM DCD’s pricing interface, design and publish DCD term sheets
• Upload and control quoting rates
• Receive incoming RFQ
DCD pricing interface on SDX-FX
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Commercial ProposalUp to 50 licenses of SPX
• Customized pricing interface for RM
• Quick DCD price based on Dah Sing traders vol and rates
• Term sheet generation (Pre-designed by Treasury)
• Send RFQ to traders
• Deal Capture
SD-Connect
• For downstream integration with Kondor+ and other systems
DCD pricing interface on SPX (Sample)
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Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Optional Extensions• Project Steps
04/12/2023 24
Additional options
Extension of product catalog
Distribute other structured products on the same SD infrastructure
SD TradeView™ for Relationship Managers
Blotter, CRM and client portfolio reporting (portfolio valuation, strategy analyses)
Real-time Risk Management for FX Option Traders
Replace Fenics with SD RMX Trader Risk Management module
Real-time risk management for vanilla and structured products
04/12/2023 25
Agenda
• Project Objectives• Current Challenge & Business Impact• Solution Requirements• SuperDerivatives Solution• Key Considerations• SuperDerivatives Benefits• Commercial Proposal• Additional Considerations• Project Steps
04/12/2023 26
Project StepsProject Steps Date
Product Scoping / Understanding Project Objectives Completed
System Trial Completed
Solution design and recommendations Completed
Confirm technical and functional specifications In Process
Commercial discussions TBD
Contract TBD
Project commences TBD
Questions?
Thank you