MUFG launches Origin Documentation Solution for Equity Linked Structured Products
MUFG’s Structured Solutions business has collaborated with Origin to achieve automation of Equity-linked Structured Note product offering.
The innovative solution was custom designed by the MUFG and Origin teams to deliver significant improvements to all existing front-to-back processes between London and Japan for structured notes and the associated exotic derivatives backing the note.
For MUFG, this is the first business-led process reengineering project for a high volume, complex structured product. The significant efficiency breakthroughs achieved here help enhance client experience and reinforce internal controls.
For Origin, this is the first entry into the high volume structured notes market with a fully API-driven solution.
MUFG and Origin have launched Origin Documentation solution for its Equity-linked Structured Notes product offering – achieving full automation and straight through processing. The documentation product forms one part of a broader drive for increased efficiency and improved client experience being led by MUFG’s Structured Solutions team in EMEA and supported by the International Equities trading team.
MUFG acts as underwriter, structurer and arranger for all self-issued equity linked structured notes. As part of a drive to improve efficiency, MUFG has transformed its processes to automate documentation using Origin, thus removing an array of manual execution steps that spanned swap houses, global distribution teams and support functions.
Driven entirely by APIs for both the inputs and outputs, Origin automatically produces term sheets, final terms, and internal execution files for structured note issuance - and associated equity-linked exotic derivatives. The solution supports any equity or index-linked structures, with full flexibility for both cash and physical redemptions, knock-in and knock-out conditions and more.
Origin and MUFG partnered to design and develop the solution through 2022, building upon Origin’s documentation product for vanilla debt issuance. Transaction data is sent via API to Origin, which then automatically generates both trade documentation and internal execution files, allowing MUFG to achieve full straight-through-processing for each issuance. The platform completely automates a manual and time-consuming issuance process involving teams across sales, structuring, operations, and legal, sitting in both APAC and EMEA.
Raja Palaniappan, CEO at Origin, said: “Origin Documentation continues to evolve and, excitingly, can now be accessed by customers via API as well as via the traditional web-based GUI. This opens up a whole new range of use-cases, and we’re proud to have worked together with the MUFG team to bring the solution to life. The high volume structured notes business is perfect for automation, and we are very excited to now be able to serve that market with this solution.”
Rahee Nayar, Head of Business Optimisation for the International Structured Solutions business, Yoshikazu Suzuki, Head of Structured Business Group Japan and Ivan Marcinko, Head of International Equity Trading, said: “Digital transformation is critical to our business strategy – the partnership between MUFG, Origin, the multiple international entities and business functions is testament to the spirit of innovation underpinning our business strategy. This achievement creates a solid base from which we can further innovate – incl. connecting to our e-trading platform, enhancing post-trade monitoring activities and expanding product sets”.
Alex Pierre, Interim International Business Head and International Head of Structured Solutions at MUFG, said: “A core cultural principle at the heart of MUFG's purpose - empowering a brighter future - is to foster innovation and simplification. We wanted to re-examine how Structured Notes, a core product offering for our Global Markets business, could be improved by challenging the status quo. In making these changes we have demonstrated our ability to successfully reengineer complex processes and most importantly materially enhance our clients’ experience".
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