Firms are ever more aware of the regulatory requirements regarding trade reconstruction, but how aware are firms of the increased competitivity in which an automated trade reconstruction solution can bring to a business?
Over the last twelve years, swap dealers have had the legal obligation to provide regulators with an accurate reconstruction of trades within 72 hours as per the Dodd-Frank Act of 2010 and similarly in a timely fashion under the EU’s MiFiD II, which entered into policy in 2018. With scandals such as the Archegos Fallout of 2021 and more recently a global financial brokers failure in disclosing vital trade information to U.S. swaps counterparties the need for an attuned automated reconstruction system has never been more pressing.
The benefits of an automated trade reconstruction solution to go beyond the security and assurance of being regulator ready.
Check out the following to see what we mean!
Loss avoidance
In addition to the regulatory safeguards which an automated system provides, trade reconstruction also enables firms to easily identify and correct trade errors before they negatively impact a business. When once this investigation process may have taken considerable time to uncover the source of error, the process is now streamlined using this technology, saving considerable time. In this way do we see an automated solution to hand businesses back control in protecting and enhancing revenue.
Profit and loss management.
In addition to loss avoidance, with enhanced visibility over trade communications firms can analyse profit and loss spikes, assessing missed opportunities through targeted reports gleaned from trade reconstructions. This not only provides businesses with invaluable trading insights but also enables firms to put in place structures to strengthen trade relations thus enhancing market position.
Furthermore, the opportunity to resolve disputes trades and customer complaints in a prompt fashion further improves customer relations, increasing competitivity and overall profitability.
Reputation stature.
In the case of cease-and-desist order firms often struggle to recover from the reputational damage incurred. One sure fire way to safeguard against this reputational risk is to be regulator ready from the offset with a trade reconstruction solution which provides firms with ability to submit an audit request with confidence.
Being an early adopter in the implementation of an automated solution also cements a firms position as a highly adept and trustworthy institution thus bolstering the reputation of business, giving it the competitive edge.
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From the above we see that not only does trade reconstruction serve a functional purpose for a compliance but additionally from a commercial standpoint, enhancing a firms revenue potential. In this way do we see automated trade reconstruction solution shifting between the first and second lines of defence.
Get in touch with a team member today to learn how VoxSmart’s award-winning solution can help enable your firm to enhance revenue potential today!
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