luxoft software development

1. For more information about Luxoft, visit
www.luxoft.com
www.luxoft.com/financial-services/
case study
Equity Swaps Management Application
Summary
13.09.2012
Develop an application for portfolio management of equity swap and total return
swap (TRS) derivatives to support the bank’s prime brokerage services.
uu Client: A top ten global investment bank
uu Business Area: Prime Services, Front Office
uu Asset Classes: Equity Derivatives
uu Technology Set: IBM WebSphere, Oracle, Java/J2EE: EJB, Spring,
Hibernate, SOAP, .NET Framework: WinForms, WPF, Web Services
uu Integration: Reuters and over 40 Bank applications, including trades,
allocations, clients and rates data sources
uu User Profile: Traders, Account managers (100+ users)
uu Geography: UK, US
uu Services Provided: Business analysis, Development, Maintenance
uu Team Size: 10+ team members
uu Duration: 5+ years development and maintenance

2. Business Challenge
Luxoft Delivered Solution
Prime brokerage services were part of the bank’s strategic development
plan that required capabilities to manage swap contracts in the portfolio.
The high-level business requirements included:
uu Automate the workflow for trade booking, approval and block trade
allocations to support the new strategic business model
uu Automated daily maintenance for contract expiration, margins, interest
calculation and changes in value
uu Automated tracking of the client trading operations
uu Automated calculation of all cash flows associated with trading activities,
such as the interest, notional fees, and dividends related to the contracts
uu Integration into existing data flows and applications
uu Data migration includes back-dated changes to the trades, prices, and
fees, as well as recalculation of the positions and cash flows
uu Decommission the legacy platform
The bank’s IT department needed a vendor with a background in the equity
derivatives domain and a proven record of accomplishment in system
design and development. Luxoft was selected as the vendor to extend the
bank’s IT team, providing expertise in both the business and technology
domains.
The biggest challenges were in designing a system and developing
a rollout plan to aggregate dozens of data feeds and to migrate and
recalculate a large volume of existing data without affecting the day-to-day
business of the bank. The system integrated the data flows from dozens of
upstream applications that contained the source data for pricing, clients,
trades and allocations information. More dozens of data flows had to be
integrated with the downstream applications used for risk management,
reporting, confirmations, and reconciliations. These integrations required
a considerable number of recalculations on a large volume of data, risking
the level of service requirements for system performance and availability.
To mitigate these risks, Luxoft initiated performance improvements for
database optimization, memory usage reduction, and transaction and error
handling.
02Luxoft - Case Study

3. 03Luxoft - Case Study
The equity swaps management application is the primary front-office
component for numerous applications that support different phases of
the equity swaps lifecycle. The technical solution is a complex information
system with a multi-tiered, client-server architecture to support a high
volume of operational data while maintaining performance and stability
level-of-service requirements. Luxoft successfully delivered this robust
technical solution on time and within the budget.
Figure 1:
Equity Swaps
Management
System Architecture
ORACLE 9.2
(LINUX)
.NET CLIENTS
(WINDOWS XP)
REPORTS (NAS STORAGE)
OUTCOMING DATA FLOWS
.NET DELTA
CALCULATION
ENGINE
(WINDOWS SERVER)
WEB SPHERE
CORE SERVER
(LINUX)
RETURES PRICES
INTEREST & EXCHANGE RATES
OTHER INCOMING DATA FLOWS

4. 04Luxoft - Case Study
Benefits
Customer Feedback
Luxoft’s solution provided the bank’s prime brokerage services with the
following benefits:
uu Increased opportunities for higher returns and lower costs in the bank’s
prime brokerage service
uu Supports the strategic business plan to improve the bank’s competitive
position
uu Improve management performance and operational coordination
through integration of the bank’s source data
“And thanks once again for the tremendous effort you’ve put in over the last
two weeks and continue to put in. This neither goes unnoticed or forgotten.”
- Bank IT Project Manager
“Thanks for all your helpful and insightful input, as ever.”
- Bank Business Analyst

5. About luxoft
Luxoft, a principal subsidiary of IBS Group, is a provider of advanced
application and software engineering outsourcing services for global and
regional enterprises. Luxoft builds partnerships with its clients, such as
Boeing, IBM, Deutsche Bank, UBS, Harman, Avaya, Alstom, and Sabre, based
on the culture of engineering excellence, innovation, and deep domain
expertise. Luxoft offers international delivery capability through its network
of state-of-the-art delivery centers in North America, Eastern Europe, and
Asia. Luxoft`s customers benefit from the right mix of technology skills,
industry knowledge, proprietary processes and methodologies, and a
choice of engagement models.
For more information about Luxoft, visit
www.luxoft.com
www.luxoft.com/financial-services/
© 2012 Luxoft