A daily cycle in DTCC Exception Manager (DXM) consists of a few short steps; classification, measurement, assignment and prioritization. Once exceptions are prioritized, the user can continue to resolve the trade within the interface using a process familiar to them. Learn more about how the DXM works by listening to our podcast.
The first area firms must explore is around unresolved issues in the reconciliation process, which involves the pairing and matching of trades and collateral. As SFTR is a dual-sided reporting regime where both counterparties are required to report trades, the details of the trade and collateral must be matched and, where they don’t match, the data must be updated until they do. In addition to unprecedented stringency in matching requirements, this process will be more complex than ever before, especially when counterparties use different trade repositories (TRs) due to unforeseen differences that may arise in the validation, processing and reconciliation logic across the TRs. It is also the first time TRs are reconciling in an XML format. As a result, numerous matching issues are likely to require attention after SFTR reporting begins.