s 3 umsetzung market practice aus sicht banking system anbieter m_emmenegger

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Implementation of the «Swiss Investment Funds Market Practice»

for SWIFT MX in the Avaloq Banking Suite

October 2013

Avaloq Evolution AG | Allmendstrasse 140 | 8027 Zürich | Schweiz

T +41 58 316 10 10 | F +41 58 316 10 19 | www.avaloq.com

Swiss Forum for Financial Standards

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Agenda

About Avaloq

Project roadmap for implementation of the Swiss Market Practice / SWIFT MX for

Funds into the Avaloq Banking Suite

Specification phase

Architecture and Implementation

Testing

Examples shown in the application

Conclusion and outlook

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Team Members

Dr. Markus Emmenegger Alexander Streule Matthias Schindler

Head of Securities Trading &

Operations

Avaloq Evolution AG [email protected]

Product Manager

Payment, Securities Trading &

Operations


Software Engineer

Securities Trading &

Operations


Securities Trading & Operations

mailto:[email protected]



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Avaloq Group – an International Market Leader

No. 1 World’s leading wealth

management software company

100+ leading banks in 20+

countries

USD 350mn revenues in

2012

>1,400+ employees in

14 offices

World class delivery

100% success rate in

implementing our solutions

7 going lives in the last 12

months

1,200+ certified partners,

involved in 90% of Avaloq

projects

Avaloq e-learning with

success proven online

trainings

Product innovation

Highest level of R&D in the

industry (> 50% of product-

related revenues)

Full front to back

integration

Ready to use model bank

(Avaloq Banking Reference)

Half year release cycles

Independent operation

Independent provider for

ASP / BPO

Global Processing

Network

BPO centres in

Switzerland and

Germany, next in UK and

Luxembourg

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Selection of reference clients

We have a proven capability to deliver

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SKSF Roadmap

Today Early involvement

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Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Early access

delivery

Avaloq SWIFT MX Funds Roadmap

2013 2014

Reference implementation in Avaloq Bankung Suite (ABS) Release 3.8

Delivery for earlier releases (R3.5 and higher, downbranch)

Specification

acceptance

Specification review

by representatives of

selected customers

Analysis and

Specification

Internal

Tests

Rollout to all

customers

Implementation

Delivery of final

software package

& documentation

Pilot Phase:

Systems integration &

parametrisation support

End of

pilot phase

Customer projects

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Structure of the Specification

• Use-Cases from a users perspective

• Message flow diagrams

• Functional requirements

• Field mapping

Basis

• SWIFT Document «Securities Trade for Standards MX - Message Reference

Guide»

• SKSF Guideline on http://portal.gefeg.com/scfs-funds-mp.htm

Benefit: setr.010 reduction of the number of fields from 1274 to 70 (!)

• XML schema from

http://www.iso20022.org/, http://www.swift.com/mystandards/

and http://portal.gefeg.com/scfs-funds-mp.htm

• Workshop with experts from our customers

Tools

• Java-Tool to convert XSD -> Excel Flat List

• Excel (Field Mapping, Message flow diagrams) / Word / Visio (Specification)

Analysis and Specification: Structure, Basis and Tooling

http://portal.gefeg.com/scfs-funds-mp.htm





http://www.iso20022.org/

http://www.swift.com/mystandards/

http://www.swift.com/mystandards/






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Special challenge: International customer base

(Swiss Market Practice vs. global standard)

Decisions

• Messages compliant with ISO 20022 can be read and sent - all fields are

available

• Only Swiss Market Practice message types are supported - no bulk

messages

• For generating and processing messages, only Swiss Market Practice fields

are considered by Avaloq product code

• Switch messages are only read and sent,

no business logic in Avaloq product code

• Customers may extend functionality to

• Implement international requirements

• Add business logic for switch messages

• Implement other customer specific requirements

Analysis and Specification : Challenges and Decisions

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Specification 1: Use Cases

Provider

Client

Back officeTrading

desk

Process bank customer order

with external provider

Front Office

Process and execute

client order as intermediary

Cancel order

ABS

Supported roles:

Buy-side (instructing party)

Sell-side (executing party)

Intermediary (combination)

ABS = Avaloq Banking Suite

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Specification 2: Message Flow Diagrams

Client External provider

(Avaloq, Buy-side) (sell-side)

g

setr.004/setr.010

f

setr.016 (PACK)

f

setr.006/setr.012

Client Provider

(Buy-side) (Avaloq)

g

setr.004/setr.010

f

setr.016 (PACK)

g

setr.011/setr.005

f

setr.017 (CANP)

f

setr.017 (CAND)

setr.004.001.03 RedemptionOrderV03

setr.005.001.03 RedemptionOrderCancellationRequestV03

setr.006.001.03 RedemptionOrderConfirmationV03

setr.010.001.03 SubscriptionOrderV03

setr.011.001.03 SubscriptionOrderCancellationRequestV03

setr.012.001.03 SubscriptionOrderConfirmationV03

setr.016.001.03 OrderInstructionStatusReportV03

setr.017.001.03 OrderCancellationStatusReportV03

Client Intermediary Provider

(Buy-side) (Avaloq) (sell-side)

g

setr.004/setr.010

f

setr.016 (RECE)

f

setr.016 (PACK)

g

setr.004/setr.010

f

setr.016 (PACK)

f

setr.006/setr.012

f

setr.006/setr.012

Normal flow Cancellation Intermediary

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Structure of the Implementation

• No MT-MX conversion, but native creation and processing of MX messages

• Use standard Avaloq architecture framework

• Import XML schemas from ISO 20022

Basis for the implementation

• Specification (use cases, field mapping)

• SKSF guideline on http://portal.gefeg.com/scfs-funds-mp.htm

• XML schemas from

http://www.iso20022.org/ and


Tools

• AvaloqScript, PL/SQL

• Avaloq Messaging Interface (AMI)

• Avaloq XSD Compiler (conversion of XSD into a Data Dictionary)

• Avaloq ice (Customised Eclipse)

Implementation: Structure, Basis and Tools






http://www.iso20022.org/documents/messages/setr/schemas/setr.0xx.001.03.zip






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Implementation 1: Architecture for Systems Integration

Networks, Builders and Handlers

Orders Orders

Orders

MT502 MT515

Message Builder

Message Handler

SWIFT

New.. Exe.

FIX

setr004 setr010

MX ISO 20022

FIX

Messages

SWIFT

Messages

ISO 20022

Messages

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Customer specific adaptions

SETR010 Message

Builder (standard)

Customer

specific

code

SETR010 Message

Handler (standard)

Avaloq Order

Customer

specific

code









Handlers & Builders exist for:

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Builder functionality

Avaloq Order

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Internal Testing

Buy-side (instructing party)

Sell-side (executing party)

ABS

1: Test using«echo chamber»

3: Insert test messages

2: Validation using

validation portal (SKSF)

ABS = Avaloq Banking Suite

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Application Demo

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Demo 1: Use Case „Subscription of Client Order“, Normal Flow

Client External provider

(Avaloq, Buy-side) (sell-side)

g

setr.004/setr.010

f

setr.016 (PACK)

f

setr.006/setr.012









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Demo 1 Screenshot 1/3 „Subscription of Client Order“, Normal Flow

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Demo 2: Use Case “Cancellation of Redemption Order”

Client Provider

(Buy-side) (Avaloq)

g

setr.004/setr.010

f

setr.016 (PACK)

g

setr.011/setr.005

f

setr.017 (CANP)

f

setr.017 (CAND)setr.004.001.03 RedemptionOrderV03








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Demo 2 Screenshot: Use Case “Cancellation of Subscription Order”









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• Avaloq is implementing SWIFT MX for funds

according to the Swiss Market Practice

• Close collaboration with customers

• Implementation completed, internal tests in progress

• Solution designed for international deployment, ready to be adapted to

global, market-specific or bilateral SWIFT MX specifications

Next steps

• Tests with external connectivity provider (test systems integration)

• Pilot implementation with one of our customers

• Rollout to all customers

Summary

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Thank you for your attention

s 3 umsetzung market practice aus sicht banking system anbieter m_emmenegger

Business

packf setr

sideg setr

canpf setr

candf setr

rece f setr

pack g setr

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