Having experienced project management and the right subject matter expertise is critical when it comes to rolling out securities worth trillions.
As part of the Federal Housing Finance Agency’s (FHFA’s) Single Security initiative, a leading financial institution serving mortgage lenders has moved into the $3.9 trillion Universal Mortgage Backed Security (UMBS) TBA market with a new 55-day security. The introduction of this security aligns with federal regulations and will make them more competitive with their top rival.
In addition, the financial institution wants to offer its dealer and investor communities the option to enter the UMBS market in advance of Single Security Go Live by exchanging their 45-day securities for the new 55-day one. This will not only benefit their customers, but also provide early liquidity to the marketplace, boosting the offering’s profile.
The client needed a process for making the exchange happen. Celerity had been working with them on two other large initiatives, so they trusted our expertise in the field. We provided a project manager with industry knowledge to define a process for integrated testing, dealer setup, and communication with dealers so things would run smoothly for them when the UMBS exchange went live.
- Process optimization + automation
- Product + service design
- Vision + strategy
Managing the details of a complex process involving big money
From setting up a test environment to gathering all the tax and legal documentation required to facilitate high-dollar wire exchanges, Celerity coordinated the many moving parts of the exchanges across 45 dealers, including:
Customer Test Environment Rollout To Dealers
This included environment management, dealer outreach, user provisioning and test case scenario creation for dealers to execute as part of their approval process. Celerity also ensured dealers could access and navigate the new exchange process in the application.
Readying Dealers For Live Exchange Execution
This involved working with legal on obtaining legal agreements, conferring with security and treasury operations on wire instruction set-up for settlement, authorizations from dealer/brokers to conduct wires and coordinating with customer setup administration for dealer organization and user provisioning.
Celerity managed the process of making dealer/brokers ready to exchange 45-day securities for 55-day securities, including approvals, document requests, user setup, website updates, and procedure documentation. We also trained dealers in the exchange process using the dealer portal application and resolved dealer issues.
Helping settle over $115B in securities exchanges in a month
Celerity oversaw a successful product rollout, setting up and coordinating 45 dealers and brokers, both domestically and internationally. Working together with the client’s Single Security adoption team we helped dealers settle over 6300 exchanges with a total PAR amount of over $115B within first month of go-live, adding liquidity to the new UMBS market.
Undefined dealer setup process to conduct exchanges
No testing environment or process in place for dealer testing
Lack of understanding about new exchange functionality
No direct line of communication with dealers
Successful setup of 45 dealers to conduct exchanges
Customer testing environment configured for integrated testing transparency
Conducted dealer demos to educate on new exchange functionality
Served as SMEs and liaison between client and dealers