Loanet as … GENERAL LEDGER
- Ross Levin
- Oct 22, 2015
- 2 min read
If you are a full service Loanet client, chances are you are not using all Loanet services. There are many reasons for this but the most common one is that you are simply uninformed of all of Loanet capabilities.
For clients with smaller books or those that are semi-independent from other trading units within the broker dealer or the banking entity they belong to, there is a way to use Loanet as true books and records.
A current typical set-up follows these simple steps:
Loanet is used as a standalone accounting/settlement system or in conjunction with another front end, either vendor based or internally developed
All of Loanet contracts are fed into a Back Office system, typically aggregated into several omnibus accounts
A logic to compute regulatory capital requirements is derived based on positions, static data and prices of the “books and records” system that is fed with Loanet data
In this scenario, you are always relying on a back end system, somewhat invisible to traders and management, to calculate the most important figures directly related to the desk ROE.
Another issue, which directly implicates your bottom line, is that a Back Office system may use securities’ prices that are not those that have been agreed while trading with a counterparty and/or readily available on the market. Moreover, some esoteric issues may not be priced at all, creating a need to independently pricing them and taking a hit while this is being done.
The solution is simple: use Loanet as your books and records and/or accounting sub-ledger. Overlay it with Bloomberg or another market data provider to achieve a full pricing transparency for an independent market value calculation, and you don’t have to rely on any other systems for your regulatory compliance needs.
Interested? Please contact us to learn more.
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