Can an Automated Trade Reconstruction solution transform your regulatory reporting process?

Confidently pass regulatory tests by ensuring timely responses and greater governance over any trade reconstruction request.

Since the financial crisis of 2008, regulatory boards and financial institutions alike have worked tirelessly to avoid another such occurrence, having traversed the rough waters of the global recession.

However, more recent financial scandals such as the Archegos fallout of 2021, have highlighted the growing urgency to improve controls around maintaining accurate records and follow appropriate risk management procedures.

The need for an effective, automated trade reconstruction solution is fast becoming a pressing and urgent issue for firms as they struggle to keep up with regulatory requirements.

The need for a trade reconstruction solution was born from the Dodd-Frank Act of 2010 which was established to enable the Commodity Futures Trading Commission’s authority to oversee the swaps market and preventing another financial crisis. This act mandates swap dealers to provide pre-trade records to the regulator within 72 hours, including swaps derivatives, FX, equities, fixed income and more.

Furthermore, MiFID II of 2018 requires firms to accurately reconstruct the lifecycle of a trade including all services, activities and transactions in order to ensure fairer, safer and more efficient markets. This requirement further increases transparency for all financial services participants and should be delivered to the regulator in a timely manner.

With the sheer scale of penalties imposed on financial institutions for failing to comply, firms are adopting advanced technology to ensure their compliance procedures are as efficient and accurate as possible. Providing senior management with evidence of appropriate employee behaviour and conduct.

The benefits of automated measures such as adopting trade reconstruction technology far exceed that of revenue protection, with significant time and resource efficiencies to be reached.


Trade reconstruction is an automated solution which connects trader and sales communications that relate to trading quotes, negotiations, orders with the transaction itself. With communications increasingly spanning multiple channels, including chat platforms, phone calls and instant messaging, firms are faced with the complex challenge of piecing together the communications that have taken place throughout a given trade.

In order to effectively meet this challenge, advanced data processing and algorithms can automate this process by ingesting and classifying large volumes of communication data for the financial domain, matching this with the information provided in trade tickets. This provides firms with powerful data aggregation capability and a state-of-the-art analysis tool for regulatory and business purposes.

Furthermore, in streamlining the reconstruction process, a firm has added security and assurance that should an external investigation take place, all books and records, including communications, are accounted for and ready to present to the regulator in a timely fashion.

Manual vs Automated: What’s the difference?

On average, it takes over 5 working days to manually reconstruct 20 trades involving 2 traders. Time spent on manual trade reconstructions can amount to over 800 hours during routine tests or ad-hoc regulator requests. This manual approach drains valuable resource and is not scalable considering such a process must deal with multiple disparate sources of information, making the 72 hours deadline difficult to achieve.

Automated trade reconstruction technology uses machine-driven data aggregation and AI algorithms that filter and match communications with trades to reduce this process down to instant access at the click of a button. Investigations that used to take months can now take hours to complete.

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