Foreign Exchange and Money Market

Operations
Industry Trends and Challenges
In the last decade the Foreign exchange and money markets have undergone signifcant changes. Volume growth and emergence of new
class of investors is now making FXMM instruments a distinct asset class. FXMM is now seen not only as a hedging instrument but also as
a specifc class of asset for trading and speculation. Last decade also has seen emergence of hedge funds and retail investors as key con-
tributors to demand. Cross border investment activity has also resulted in increasing demand for FX instruments. Wide spread usage of
Electronic trading networks and innovative trading strategies necessitated changes to infrastructure, workfows and overall resiliency of
IT systems. These key trends are shaping new approaches to risk management, collateral management, regulation and client servicing.
Success of FXMM operations is heavily contingent not only on a scalable, reliable system but also on controls and risk management fea-
tures these systems provide. Reducing Cost per trade and improving STP rates continues to be high on the agenda for bank executives
as the industry adopts a commoditized operations model and the variety and the complexity of the products / instruments increases.
Risk management and compliance to new regulations without escalation in costs continues to shape not only investments in the new
systems but also the back offce operations. These challenges are driving Change The Bank (CTB) initiatives to focus on optimization of
existing operations infrastructure and workfows, increased adoption of outsourcing and off shoring strategies, and underlying platform
improvement.
Cognizants Capabilities across Foreign Exchange and Money Market Operations
Cognizant has strong experience of supporting marquee clients across instruments and products in the FXMM operations. Cognizant
provides 85% offshore coverage for FXMM Operations of a leading investment bank, making this engagement one of the largest
third party outsourcing operations.
Middle and back offce experience:
Confrmations
and settlements
Reconciliations
Checking with Counterparties/Clients for Trade confrmation for open trades within timelines
Ensuring on-time and accurate payments as per market cut-off timelines and Capturing all SSI
updates that are received from Clients/Agents
Investigations for re-effecting duplicate payments, Updating Omgeo alerts
Reconciliation between Front Offce and Operations systems, Internal Books and passing of Internal
Ledger and Journal entries
Reporting and clearing of breaks, investigating Non-Receipt/Non-Payment cases
Liaising with Business for P&L write offs and Maintenance of Suspense account
Compute and make Margin calls for counterparties
Managing fails and interest processing
Prime Brokerage Margins: Approving payments, Setups, Exceptions Processing, Margin calls,
Pricing issues management
Margin
Management
World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
Email: inquiry@cognizant.com
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone: +44 (0) 20 7297 7600
Fax: +44 (0) 20 7121 0102
Email: infouk@cognizant.com
India Operations Headquarters
#5/535, Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
Email: inquiryindia@cognizant.com
Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other
trademarks mentioned herein are the property of their respective owners.

Theme Impact
Consolidation 45% productivity benefts through various process improvement projects for past 3 years notably through
consolidation of operations into a single 24x7 team. This allowed for benefting from cross team buffers and
effectively managing spikes in specifc instrument volumes
Standardization 80% reduction in failed payments and claims by standardizing operations across instruments and products
Tool implementation Error Financing Costs brought down by 96%. This was achieved through standardization of error codes and
implementing a CRM workfow tool. Set up a Zero tolerance group that identifed error patterns and worked with
operations team in bringing down the errors through personalized improvement plans and feeding CTB initiatives
Dispute
Management
Trade reconciliation with clients and managing all types of portfolio disputes
Identifcation/ resolution of Valuation differences and Unmatched trades
Valuation and
Accounting
Valuations: Prepare statements for clients and counter parties
Daily P&L Generation reconcile between risk management system,
ledge and P&L, review balance sheet movements, preparing trader packs
Review attributions, book accruals and allocations
Timely Reporting of Trade Volumes/STP/Clearance/Outstanding etc.
Weekly KPI performance reporting
Reporting of Basel II items and Impact resolution of Outstanding
MIS Reporting
and Control
Clients serviced Products supported Regulations Confrmed
Inter Banks
Corporates
Hedge Funds
Pension Funds
Fund Administrators
Broker/Agent Banks
T-Bills,
Commercial Papers (CPs),
Certifcate of Deposits (CDs)
Unsecured Loans & Deposits
Reverse Repos
Swaps
Foreign Exchange: Forwards,
Spots, NDFs/NDOs
Money Market
Vanilla Options
Precious Metals Options
Collateral and dispute
management
MAS
HKMA SEC
Fed Reserve
FINMA
Confrmations,
settlement and recon
BAFIN
FSA
SEC
MAS
Product control
SEC
FASB
FSA
IASB
Products Supported Geographies Data Sources
FX Perspective
Morning Advisor
Weekly Calendar
Emerging Markets Navigator
Emerging Markets- India Nutshell
Asia
Europe
US
Bloomberg
Thomson Reuters
Haver
Yield book
Eqargs
Research capabilities:
Change The Bank (CTB) Focus
Cognizant delivers signifcant benefts to clients through CTB initiatives by leveraging deep operations experience, a pool of techno
functional CTB Consultants and Lean six sigma experts.
Below table summarizes some of the benefts we delivered through CTB initiatives to our clients.
Basic
Maintenance &
Designing
Data monitoring & tracking news from various sources to analyze the impact on
FX and commodities under coverage
Economic calendars (Weekly, Monthly), building data models and update periodically
Analysis/
Brief write-ups
Creating reports which include technical analysis on FX and precious metals
(Daily, Weekly, and Quarterly) and writing commentary on various economic releases
and implications in different markets