TREASURY APPLICATIONS SYSTEM MANAGER - TASMAN

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1 TREASURY APPLICATIONS SYSTEM MANAGER - TASMAN TASMAN is a fully integrated system that segregates the Front, Middle, and Back Office on security access levels. TASMAN provides accounting flexibility. TASMAN does a clear segregation of the front, middle and back office functions where the: Front office refers to the deal capturing, position keeping and the cash management function. Middle office includes control, audit, profit and loss, risk and limit management. Back office refers to confirmations, settlements, statements, regulatory reports and other administrative procedures. TASMAN has been developed and designed from day one to be client/server and make use of the latest GUI functionality such as Windows connectivity products. TASMAN is written in PROGRESS, which is a full graphical client/server-programming tool on its own relational database. The front, middle and back offices are totally integrated and can be fully linked to other applications such as Riskflow Asset Liability management System (ALMAN), Riskflow Interest Rate Forecasting System (IFS), as well as word processing, spreadsheets and Management Information Systems. ŀ1 P a g e FRONT OFFICE (DEALER) SECTION The front office section of the system, which is only accessible to the dealers through the security set-up procedure, allows the dealers to: Provide customer service through on-line account enquiries, updating, and rate changes.

2 Support paperless trading. There is no need to fill in dealing slips and deals will be directly captured onscreen for verification by the back office. Deal with the latest real-time information (including on-line profit/loss) with no end of day runs. Be more productive. It is user friendly, designed by users Do full cash management activities on all bank accounts with system generated entries such as maturities and also allowing for manual updates of cash transactions outside the system. Use dealing analytic tools such as price calculations, break-even analysis, calendar and carry transaction calculators. Produce profit and loss reporting. BACK OFFICE (ADMINISTRATION) SECTION The back office module of TASMAN handles confirmations, settlements, statements, journal entries, regulatory information reports, and other administrative procedures. The back office module includes an action flags function that signals pending events such as deposits maturing, payments that are due, cheques to be printed, interest payments etc. Reporting capabilities allow you to have up to date, on demand reports. Confirmation correspondence is automatically generated and can be processed as required. A Trial Balance is updated automatically as transactions get processed. Detail journals are kept and can be exported to a Company wide GL system. Detail information is kept on transactions and can be aggregated and exported to ALMAN the Riskflow Asset and Liability Management system. TASMAN keeps track of all scrip and securities that accompanies transactions. It allows you to group scrip in parcels and also to split a security in more tradable denominations. There are various inventory reports to keep track of your own securities as well as securities in safe custody. The necessary information to complete your regulatory reports like month-end and average balances is available and aggregated under various time buckets and exposure categories. In the Back Office Module you set up all environmental details in preparation for dealing activities. These details include: Portfolio breakdowns Counter party information 2 P a g e

3 Settlement account details Dealer specifications Brokers details Instrument in which you deal Public holidays Currencies Rates and General organisation information The System Supervisor s role is executed through the Administration module. Users are granted access to specific activities in a module. Access to setting user access levels is granted to your organisation s System Supervisor only a trial balance facility and will post entries to your General Ledger daily, weekly or monthly. General Ledger Entry Transactions include: Detail transactions Detail bank transactions Consolidated transactions Export to general ledger system Remove old general ledger transactions General ledger balance report MIDDLE OFFICE (RISK CONTROL) SECTION The middle office section is the management and control section. Except for the defining of limits the middle office can view everything in the system, but is not allowed to enter any deals or do any of the administrative actions. Middle office can do the following: Online, real-time information Comprehensive limit monitoring/reporting Enforces limit, i.e. Dealers cannot breach limit prescribed by middleoffice Revaluation with rate feed from Reuter What-if analysis Dealers/products/portfolio/aggregate profitability Transfer pricing to adjust profitability for funding cost Comprehensive operational controls, e.g. Rate/date deviation, audit trails 3 P a g e

4 UNIQUE FEATURES The unique features of TASMAN include the following: Building interfaces such as to SWIFT, Reuters, general ledgers and ALMAN in response to user needs Excellent internal controls e.g. Audit trails, segregation of front and back office, and custodian and bank script Cash management facility Open systems technologies Report builders Real-time update of all limits Counter party details including statements for the receiver of revenue Exposure evaluation which instantaneously Revalues FX positions Revalues bond positions Revalues discount instruments Calculates interest to date on all instruments Displays the effect of changes in interest rates Updates cash position by currency Separates settlement from dealing operation Imposes constraints on user and dealer accessibilities AC133 calculations Fair value calculations 4 P a g e

5 FUNCTIONAL REQUIREMENTS Deal Capturing and recording TASMAN covers activities in the money market, capital market, derivative market and foreign exchange market. TASMAN caters for the following instrument categories: Transaction & Accrual Based Instruments Contract Based Instruments 5 P a g e

6 Secured Instrument Derivatives Bonds 6 P a g e

7 Foreign Exchange Cash Management TASMAN has an integrated cash management component that allows the user to create cash flow reports specifying the cash flow per account, currency, specific date or period into the future for all transactions captured in the system as well as user defined external cash flow transactions that may have an impact. Select date or time period Record all system flows per nostro account or currency Detail Drill Down Manual cash flow adjustments MS Excel Analysis TASMAN allows the user to drill down for transaction detail making up the consolidated information. 7 P a g e

8 Risk Management Online, real-time information Comprehensive limit monitoring/reporting Enforces limit, i.e. Dealers cannot breach limit prescribed by middleoffice Revaluation with rate feed from Reuter What-if analysis Dealers/products/portfolio/aggregate profitability Transfer pricing to adjust profitability for funding cost Comprehensive operational controls, e.g. Rate/date deviation, audit trails Reporting There are many standard reports from TASMAN. There is also an end-user report writer, RESULTS, available for users to design their own reports and queries. All Reports can be exported to Excel or Text format. OTHER REQUIREMENTS Real time application: TASMAN offers a fully integrated, online, real-time, multi-currency treasury system, that covers the Money, Repo, Capital (Bonds), Forex, Equity and Derivatives Markets with a linked facility to ALMAN. Straight Through Processing: TASMAN supports Straight Through Processing, Front to Back. Also see diagram1. 8 P a g e

9 Internal and External Integration: TASMAN provides accounting flexibility and Riskflow has experience integrating TASMAN clients to 15 different accounting packages. Riskflow has the skills to integrate TASMAN to any other system as required. TASMAN already provides for ALMAN codes to link instruments and position with the ALMAN system. Access Controls: Segregation of the Font, Middle and Back Office is access controlled and with in each segregated module, user access is defined per activity, see diagram below. Regulatory Compliance TASMAN already conforms to a number of regulatory requirements such as AC133 fair value calculations, mark-to-market and will have no problem to comply with IFRS7 Financial Instruments disclosures. Administration Riskflow provides all the necessary services in the form of a help desk, internet support, manuals and training to ensure the successful implementation and running of its systems. See attached Appendix A: Index Manual- Dealing Module, 9 P a g e

10 Appendix B: Index Manual- Administration Module, Appendix C: Index Manual- Risk Module FUTURE REQUIREMENTS External Integration Riskflow already has built in links to Reuters and has the capability to provide any external integration such as STRATE when required. Version upgrades Product Support is a support service that provides direct access to software experts for product-specific questions about installing and operating software. Support includes proactive notifications, , web page support pages, technical notes, product life-cycle information, and the ability to log technical assistance requests. Riskflow places products into a life cycle based on major versions. Enhancements are provided and reflected by the second digit. Patches will only be produced for problems, which constitute a database down situation, or are seriously affecting your business. Please note that patches do not go through the QA process, therefore where ever possible we will request that you wait for the next maintenance, or new version release and/or to implement a workaround where feasible, to ensure new issues do not get introduced. We strongly advise you not to deploy with a patch, unless you are experiencing a particular problem the patch addresses. You should then upgrade to the next maintenance release as and when it becomes available. TECHNICAL System Architecture TASMAN is a client-server system. The database would reside on a server computer that may be running Microsoft NT, or any one of a number of different versions of Unix. The network protocol used is TCP/IP. See diagram 6 for technical architecture diagram. Desktop machines (Client workstations): should have the following minimum specifications Operating system (OS) Preferably Windows XP Professional, Windows 2000 (works with Windows 98, Windows NT) Hard disk drive (HDD) space required is less than 1Gb (Approx. 400Mb for Progress if configuration is used where Progress is not centralised on server). Central process Unit (CPU) Pentium II, preferably III or higher Read access memory (RAM) 128 Mb minimum (preferably not less than 256 Mb) 10 P a g e

11 The server machine: should have the following minimum specifications; Pentium IV Server with at least 10Gb HDD (Approx. 400 Mb for Progress; 100 Mb provision for Tasman and database) Minimum 256 Mb RAM OS Windows 2000 (Service pack 4); Windows 2003 Small Business Server or Windows NT Server Database and Development Environment Riskflow uses the Progress 4GL development language and the Progress Relational Database management system for the development of TASMAN. Progress Company The Progress Company is a global supplier of software products and services for developing, deploying, integrating and managing software and e-business solutions. The company's extensive partner base includes more than 2,000 Independent Software Vendors (ISVs) and Application Service Providers (ASPs) who supply more than $5 billion in Progress-based applications and services annually. Over 40,000 organizations across 100 countries including 70% of the Fortune 100 rely on Progress technology. Progress 4GL Development Language A powerful, high-level Fourth-Generation development language to create mission-critical applications to meet business needs. Product Highlights Reduces complexity by providing a single language for developing an entire application including user interface, business logic and data I/O statements Enhances developer productivity by reducing the learning curve and maintenance requirements through an easy to learn, English-like syntax Helps lower server deployment costs and provides greater flexibility through portable code generation Supports the development of graphical and character interfaces while maintaining the integrity of a single set of source code to ease administration Reduces programming effort by including automatic transaction control and record locking Includes a powerful batch processing capability for server-based application development Supports object-oriented, event-driven, and structured programming paradigms Open to DDE, DLL and 'C' subroutines to easily add interoperability Supports international character sets for localization to take advantage of dynamic emerging markets 11 P a g e

12 Progress Relational Database Management System Applications must perform in complex, enterprise and Web-centric computing environments that demand a highly scalable and open relational database management system (RDBMS). The Progress RDBMS is a high-performance, relational database that scales from single-user Windows desktop systems to massive symmetric multiprocessing (SMP) and cache coherent non-uniform memory (ccnuma) UNIX systems, supporting thousands of concurrent users. The Progress RDBMS offers many characteristics that are essential to both application developers and IT departments, such as: The industry s lowest cost of ownership High availability and absolute reliability Support for mission-critical transaction processing Unmatched performance Broad platform support Open interfaces for integration with other tools and applications Leverage the Benefits of the No 1 Embedded Database The Progress RDBMS is the world s no1 embedded database, according to a Gartner Group/Dataquest study. That means that more developers put Progress at the heart of their applications than any other database. One reason why is that Progress ease of maintenance, superior reliability, and high availability translate to the industry s lowest cost of ownership. Industry analysts and customers have attested to the fact that Progress provides the lowest cost of ownership of any relational database, year in and year out. Scalable Database Presents No Upper Limits The architecture of the Progress storage engine lets your applications take full advantage of the power of your computing systems. With support for over 10,000 concurrent users and numerous terabytes of data, it provides exceptional capacity for large-scale, High-performance computing. As your organization grows, you can be assured that the Progress Enterprise RDBMS will meet the challenge. Continuous development work on maximizing database performance and scalability has enabled the RDBMS to demonstrate: Perfect Linear Scalability with a real-world application and 5,000 concurrent database users, maintaining flat sub-second response times. The ability to handle virtually any transaction workload with recordbreaking throughput of 600,000 transactions per minute (ATM). 12 P a g e

13 Contingency and disaster recovery TASMAN Technical Features Availability: A bullet-proof application with full error recovery (essential for mission critical applications). Productivity: An efficient processing engine for rapid data handling in a full client/server environment. TASMAN prevents jobbing losses by maintaining proper and up-to-date records. Growth: A scaleable environment, which allows you to expand easily, from a PC-based network system to UNIX midrange when needed. Connectivity: A Windows environment with almost unlimited connectivity options essential for systems integration and high-level management reporting. Cost Effectiveness: Hardware independence made possible by the use of the PROGRESS RDBMS, and a low-cost operating environment made possible today by PC technology. Backup: No need to maintain back up machines for disaster recovery purposes as any of the user workstations will be able to run the full application (with reduced performance but no loss of functionality). SYSTEMS CONTROL TASMAN makes ample provision for controls regarding the input and update of static data. TASMAN has a comprehensive audit trail function. Audit trails registered in the system can be viewed using the Audit Trail Viewer. User can enter the two dates to specify the period for retrieval of audit trail details. Audit number generated by the system User code Transaction type refers to areas where changes were made, e.g. counterparty information Date and time audit trail captured Account number generated by the system Sub account number (if applicable) Counterparty code Transaction amount (if a change affects a specific transaction) Transaction date There are four(4) audit trail reports available in TASMAN: Exceptions by User Exceptions by Counterparty Exceptions between dates Exceptions by Accounts 13 P a g e