Point Nine: driving innovation
29 September 2020
Theo Mallas, marketing manager, and Alan Dzhanaev, client success manager, at Point Nine discuss the service providers successes and what’s next on the agenda after SFTR go live
Image: Gajus/stock.adobe.com
Tell us about your company. What’s your main focus?
Point Nine is an industry leader in post-trade processing and regulatory reporting. Founded in 2002 as Point Nine Financial Technology, we work with both buy-side and sell-side firms to help them address the ever-expanding challenges of post-trade processing and regulatory reporting.
In 2019, Mitsubishi UFJ Trust and Banking Corporation (MUFG) acquired Point Nine to satisfy it’s long-term goal of becoming a global leader and enhance the Trust Bank’s services and presence. Resulting from the acquisition, Point Nine was spun off to Point Nine Data Trust, the end-to-end multi-regime reporting solution. Since then, Point Nine has offered technology and managed services to more than 140 customers across the globe including hedge funds, asset managers, brokers, and banks.
Point Nine is a team of industry experts that specialises in regulatory reporting, equipped with proprietary cloud-based technology designed to help customers fulfill their regulatory reporting requirements, streamline their processes for storing, processing and submitting data from various sources. The flexible architecture of our product includes multifunctional portal features that have the ability to report customer activities in real time.
What differentiates you from your competitors?
What makes Point Nine stand out is our ability to access data from various systems, including customers’ in-house solutions. Our architecture has an automated way of fetching, receiving or submitting enriched data while helping the increased accuracy testing, perform advanced regulatory reconciliations, testing reference data and having a proper control framework.
Aside from the quality of our service and product, Point Nine aims to become a driving force of market change and reform. Our team is our strength. We are proud of our team’s industry knowledge and are committed to keeping up with the latest changes in regulations. We are smart, fun, and driven, however, we also take our community involvement and responsibility seriously.
We are dedicated to giving back to the community, including other businesses, supporting local charities, and helping people reach their utmost potential while collectively securing a sustainable future. Cultivating potential drives how we lead and empower our team, how we build our product and services for clients, and how we engage with the community at large which sets us apart from the competitive landscape.
SFTR went live in July, how did it go?
As many other firms, we were expecting a culmination of several years of technical preparation to go live in April with phase one. After the plan initiated by the European Securities and Markets Authority (ESMA) to mitigate the impact of COVID-19 on the EU financial markets, as well as a three-month postponement of the reporting obligations related to securities financing transactions (SFTs), we gave our team extra time to test phase one and two at the same time.
Furthermore, we had an opportunity to scrutinise sample reports and overview of repo lifecycle events from the International Capital Market Association’s (ICMA) first version in February of recommendations for reporting under Securities Financing Transactions Regulation (SFTR).
What lessons did you learn from the first and second phase of SFTR?
As both phases went live on the same day it had a little effect on the overall implementation of the highly complex SFTR reporting regime. The main lesson we learned is that working on the quality of the report is one of the most difficult tasks for everyone who has been affected by this regulation.
Tracking SFTR questions and answers or any additional guidance expected from ESMA plus recommendations from ICMA and other involved parties like working groups and so on. Our team of professionals are looking into these updates including direct work with local NCA on the expected quality.
Although we have seen a high level of transactions validated by trade repositories (TRs) on SFTR on the first days of reporting, this is mostly based on the good sample of forming best market practices by the parties responsible to report and their cooperations with different types of regulatory bodies.
What challenges did you face and overcome?
One of the main obstacles of the securities lending market is that it is not standardised as a derivatives market at the European Markets Infrastructure Regulation (EMIR) implementation time. From what we have seen so far the operating models and expertise in organisations are significantly varied..
The difference of processing data in operational flows is causing a significant mismatching process at the TR levels, so working on operational and legal unification in the securities lending market is an essential part of the successful SFTR implementation.
Technical issues of consuming and publishing xml format reports are linked with the additional resources required to create a reporting flow. We are also facing some of the report validation obstacles in collateral positive and negative values, and firms interpretations of the life-cycle events. That said, Point Nine as a data vendor is not having difficulties over getting static data for the report such as a legal entity identifier or bond reference.
Buy-side firms are due to go live next month, for a long time we have heard they are not ready. What is the state of play now?
The buy-side firms are less likely to have the same success in validation rate at the TR level on the phase one and phase two implementation due to the lack of the availability of the required resources and systems.
We believe that sophistication of the static data or parts like reconciliations of the collateral would be a huge task for smaller firms to automate in their reports or to agree with static data vendors to provide on the daily basis.
Originally there was talk of larger buy side firms going it alone and by-passing the regulatory firms and going straight to the TRs. Has there been an influx of buy side firms opting for your solution last minute?
Having learned from the previously implemented frameworks we expect to see some clients with direct access to the TR will require enrichments help on our side.
Our company customers vary by readiness of tier systems to provide information necessarily to fulfill reporting obligations and some of them opting out for file conversions and unique transaction identifier distribution services while others are getting a full package of the services we provide.
Do you foresee further reporting or risk-related regulations coming as a consequence of what regulators find while analysing SFTR data?
We presume that the regulator will be pushing towards the quality of the report provided by reporting parties. Control frameworks within the organisations would need to work closely with testing errors and documenting trading scenarios they have using best market practices.
Point Nine is an industry leader in post-trade processing and regulatory reporting. Founded in 2002 as Point Nine Financial Technology, we work with both buy-side and sell-side firms to help them address the ever-expanding challenges of post-trade processing and regulatory reporting.
In 2019, Mitsubishi UFJ Trust and Banking Corporation (MUFG) acquired Point Nine to satisfy it’s long-term goal of becoming a global leader and enhance the Trust Bank’s services and presence. Resulting from the acquisition, Point Nine was spun off to Point Nine Data Trust, the end-to-end multi-regime reporting solution. Since then, Point Nine has offered technology and managed services to more than 140 customers across the globe including hedge funds, asset managers, brokers, and banks.
Point Nine is a team of industry experts that specialises in regulatory reporting, equipped with proprietary cloud-based technology designed to help customers fulfill their regulatory reporting requirements, streamline their processes for storing, processing and submitting data from various sources. The flexible architecture of our product includes multifunctional portal features that have the ability to report customer activities in real time.
What differentiates you from your competitors?
What makes Point Nine stand out is our ability to access data from various systems, including customers’ in-house solutions. Our architecture has an automated way of fetching, receiving or submitting enriched data while helping the increased accuracy testing, perform advanced regulatory reconciliations, testing reference data and having a proper control framework.
Aside from the quality of our service and product, Point Nine aims to become a driving force of market change and reform. Our team is our strength. We are proud of our team’s industry knowledge and are committed to keeping up with the latest changes in regulations. We are smart, fun, and driven, however, we also take our community involvement and responsibility seriously.
We are dedicated to giving back to the community, including other businesses, supporting local charities, and helping people reach their utmost potential while collectively securing a sustainable future. Cultivating potential drives how we lead and empower our team, how we build our product and services for clients, and how we engage with the community at large which sets us apart from the competitive landscape.
SFTR went live in July, how did it go?
As many other firms, we were expecting a culmination of several years of technical preparation to go live in April with phase one. After the plan initiated by the European Securities and Markets Authority (ESMA) to mitigate the impact of COVID-19 on the EU financial markets, as well as a three-month postponement of the reporting obligations related to securities financing transactions (SFTs), we gave our team extra time to test phase one and two at the same time.
Furthermore, we had an opportunity to scrutinise sample reports and overview of repo lifecycle events from the International Capital Market Association’s (ICMA) first version in February of recommendations for reporting under Securities Financing Transactions Regulation (SFTR).
What lessons did you learn from the first and second phase of SFTR?
As both phases went live on the same day it had a little effect on the overall implementation of the highly complex SFTR reporting regime. The main lesson we learned is that working on the quality of the report is one of the most difficult tasks for everyone who has been affected by this regulation.
Tracking SFTR questions and answers or any additional guidance expected from ESMA plus recommendations from ICMA and other involved parties like working groups and so on. Our team of professionals are looking into these updates including direct work with local NCA on the expected quality.
Although we have seen a high level of transactions validated by trade repositories (TRs) on SFTR on the first days of reporting, this is mostly based on the good sample of forming best market practices by the parties responsible to report and their cooperations with different types of regulatory bodies.
What challenges did you face and overcome?
One of the main obstacles of the securities lending market is that it is not standardised as a derivatives market at the European Markets Infrastructure Regulation (EMIR) implementation time. From what we have seen so far the operating models and expertise in organisations are significantly varied..
The difference of processing data in operational flows is causing a significant mismatching process at the TR levels, so working on operational and legal unification in the securities lending market is an essential part of the successful SFTR implementation.
Technical issues of consuming and publishing xml format reports are linked with the additional resources required to create a reporting flow. We are also facing some of the report validation obstacles in collateral positive and negative values, and firms interpretations of the life-cycle events. That said, Point Nine as a data vendor is not having difficulties over getting static data for the report such as a legal entity identifier or bond reference.
Buy-side firms are due to go live next month, for a long time we have heard they are not ready. What is the state of play now?
The buy-side firms are less likely to have the same success in validation rate at the TR level on the phase one and phase two implementation due to the lack of the availability of the required resources and systems.
We believe that sophistication of the static data or parts like reconciliations of the collateral would be a huge task for smaller firms to automate in their reports or to agree with static data vendors to provide on the daily basis.
Originally there was talk of larger buy side firms going it alone and by-passing the regulatory firms and going straight to the TRs. Has there been an influx of buy side firms opting for your solution last minute?
Having learned from the previously implemented frameworks we expect to see some clients with direct access to the TR will require enrichments help on our side.
Our company customers vary by readiness of tier systems to provide information necessarily to fulfill reporting obligations and some of them opting out for file conversions and unique transaction identifier distribution services while others are getting a full package of the services we provide.
Do you foresee further reporting or risk-related regulations coming as a consequence of what regulators find while analysing SFTR data?
We presume that the regulator will be pushing towards the quality of the report provided by reporting parties. Control frameworks within the organisations would need to work closely with testing errors and documenting trading scenarios they have using best market practices.
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