Product Information
Increasing automation with SAP Broker Reconciliation for Commodity Derivatives
Intro
Commodity organizations that purchase and sell derivatives for hedging purposes, or otherwise, must ensure their system of record matches that of their brokers who executed them on their behalf. It is an important, manual, tedious & time-consuming job, that needs to be done daily. This is because traders would assume their current position to be correct and form a basis for further trading decisions for the day.
With SAP Broker Reconciliation for Commodity Derivatives, customers can automate the comparison and reconciliation of their derivative accounts with statements received from their trading and clearing brokers and detect any discrepancies much earlier, thereby reducing their commodity market risk exposure.
The Industry Cloud is SAP’s strategy to extend the intelligent suite with innovative cloud solutions. Built by SAP and partners, it offers an agile, open business and technology platform for our customers. Watch Julia White, SAP’s Chief Marketing and Solutions Officer, provide a great intro on the Industry Cloud. Explore even further at https://www.sap.com/industries/industry-cloud.html and Industry Cloud Community.
Functionality Description
SAP Broker Reconciliation for Commodity Derivatives allows to reconcile Trading Broker statements, focusing on the daily trading activities, as well as Clearing Broker statements, including more information on overall account positions, changes in positions and exercised options.
Key features of the product include:
- The ability to import trading and broker statements
- Extraction of commodity risk derivatives information for exchange traded futures and options from SAP Commodity Risk Management for SAP S/4HANA
- An interface enabling customers to include risk derivative information from third-party systems
- Automated comparison and reconciliation of trades and positions against broker statements
- User-friendly web-based SAP Fiori app, allowing end users to work on exceptions for missing trades and mismatches in trades as well as to manually reconcile open items
- Versioning of reconciliations and auditable reconciliation history
SAP Broker Reconciliation for Commodity Derivatives: Dashboard
SAP Broker Reconciliation for Commodity Derivatives: Reconciliation Overview List
SAP Broker Reconciliation for Commodity Derivatives: Reconciliation Detail
Check out more information on SAP Help.
What are the benefits?
Customers will benefit by using the product in the following ways:
- Automate the reconciliation process resulting in workload reduction for middle and back-office risk management staff
- Increase speed and efficiency for trade reconciliation
- Reduce the likelihood of errors compared to today’s processes involving custom solutions and even manual steps
- Decrease financial risk due to inaccurate positions from undetected discrepancies
What’s Next for the Broker Reconciliation?
Future functional enhancements target the handling of margins, broker fees and performing matching and closeout activities. To stay up to date on the future of Broker Reconciliation for Commodity Derivatives, see the SAP Roadmap Explorer.
Now, you have learned about the business challenges in Broker Reconciliation and the benefits of automation and how SAP addresses and streamlines this process with the new SAP Broker Reconciliation for Commodity Derivatives App.
Please feel free to ask questions on Industry Cloud in general or this App in particular.
With Release 2 the following additional Features were published and are available since May 2022:
Customers benefit from further automation, as well as people efficiency in the broker reconciliation process.
With the latest release of SAP Broker Reconciliation for Commodity Derivatives, users are now able to trigger actions such as matching and closing futures directly in the App with update to the system of records.
This release is available February 14th 2023 and delivers the following enhancements:
At some point in time during the lifetime of future trades, long and short positions need to be closed out (matched) against each other. There are two methods to achieve this:
The company decides which trades to close out and informs the clearing broker to perform the matching of the designated positions. Or the task to select the positions and trigger the matching is initiated by the clearing broker.
In both cases, closeouts are reported in the subsequent clearing broker statement.
With the “Trigger Matching” functionality, you can make use of the method to have matching activity initiated by the clearing broker and automatically trigger the same actions in the backend system. This assures your backend positions stay consistent with the positions managed at your clearing broker while also eliminating the need to manually perform the required matching.
This increases automation, reduces errors and assures correct positions and MTM calculations all while enabling quicker reconciliation to reduce the burden on risk management and back-office staff.
SAP now delivers predefined SAP Cloud Integration Framework content based on a SAP defined spreadsheet format for trading and clearing broker statements.
This enables a quick start to deploy the solution, while also serving as a template that can be copied and adjusted for custom and broker specific data formats and flows.
Moreover, you can access SAP Cloud Integration APIs via your preferred API platform to upload your broker statements.
The SAP provided API and integration content significantly reduces the required implementation and maintenance effort for the import of broker statements, enabling support for different formats and structures through modelling instead of customer coding. This also facilitates and speeds up direct API integration to broker systems.
Learn more about how you can use the SAP Cloud Integration Framework here.
Facilitate clearing broker reconciliation with multiple accounts with the same clearing broker by mapping the accounts to different future account subsets in the backend system.
With this feature you can assign one or more future accounts from the connected backend system to a dedicated clearing account managed by the clearing broker.
With the latest release new services were introduced to ease end users work. One of them is SAP Built-In support, where you have direct access from the App to all necessary documentation like User Guide, Administration Guide or the help portal. Moreover, you can create service and support tickets out of the App.