Confidential Build Software to Test Software exactpro.com Test Automation for DLT-based Applications in Finance Alyona Bulda, VP, Technology, Exactpro Iosif Itkin, co-CEO and co-founder, Exactpro

● Incorporated in 2009 with 10 people, our company has experienced significant growth; now employing over 500 specialists. ● Member of Hyperledger since January 2019. ● A specialist firm focused on functional and non-functional testing of exchanges, clearing houses, depositories, banks and other market infrastructures. ● We provide software testing services for mission critical technology that underpins global financial markets. Our clients are regulated by FCA, Bank of England and their counterparts from other countries. ● Part of London Stock Exchange Group (LSEG) from May 2015 until January 2018. The Exactpro management buyout was successfully completed in January 2018. We are headquartered in the UK and have operations in the US, Georgia and Russia. Introduction: a few facts about Exactpro

We have a global software Quality Assurance client network

Typical Requirements for an Exchange System Daily capacity - 100+ mln transactions Peak rates - 40k+ transactions per second Average round-trip latency - <100 microseconds Availability - 100% 3000 trx 2.5 cm <1 mm

Trading vs. Post Trade

The most challenging type of financial platforms is post-trade systems ✓ Clearing and settlement systems ✓ Collateral Management systems ✓ Risk Management systems ✓ Market data systems ✓ Payment systems ✓ etc.

Delivering Large Post-Trade Initiatives: Key Challenges Challenges: - There is a multitude of components in modern complex post- trade infrastructures; - Upstream and downstream system dependency; - The participant structure is very complex; - Trade/Xfer/Position/Account life cycle; - The number of Asset Classes may vary; - The complexity of the Risk calculation process; - Access via a set of API endpoints. The challenges and their parameterizations lead to a significant number of test scenarios.

Delivering Large Post-Trade Initiatives: Technology Transformation ⇒ Many financial institutions (including Exactpro customers) invest in DLT; ⇒ Traditional platforms undergo transformation; ⇒ The changes are significant, so new infrastructures need thorough testing; ⇒ New platforms -> new test approaches? New testing tools?

⇒ The same complexity of participants/processes/asset classes; ⇒ Hybrid nature: conventional functionality + new business logic involving interactions within a blockchain network; ⇒ High diversity of underlying DLT frameworks; ⇒ New form of business logic execution - smart contracts. A new smart solution is needed: a multifunctional and multicomponent framework

Delivering large Post-Trade initiatives: key challenges and innovative QA

Case Study: Distributed Ledger Technology in Post-Trade Infrastructure E2E scenario for Position update flow

Exactpro Test Framework and Test Approach for DLT-based system 3 steps on the ledger side: 1st - Initialisation of positions 2nd - Trade creation and participant notification 3rd - Positions updates Across each and every step the test framework provides different methods to validate the endpoints, inputs and outputs. The actual business flow steps and validation check items are transformed into ClearTH matrix after execution of which the deviations from the expected behaviour can be analysed.

//Initial state & SODpositions (set of validations for initial states of positions) //Trade registration RegisterTradeA BankA registers trade GetTradeA1 Bank A tries to get its own trade VerifyTradeA1 Verifying that Bank A sees its own trade GetNoTradeB Bank A tries to get trade registered by Bank B VerifyNoTradeB Verifying that Bank A doesn't see trade registered by Bank B RegisterTradeB BankB registers trade GetTradeB1 Bank B tries to get its own trade VerifyTradeB1 Verifying that Bank B sees its own trade GetNoTradeA Bank B tries to get trade registered by Bank A VerifyNoTradeA Verifying that Bank B doesn't see trade registered by Bank A //CCP changes GetBalanceA3 Bank A should have updated balance GetBalanceB3 Bank B should have updated balance GetTrade_CCP CCP tries to get trade registered by Bank A & Bank B VerifyTradeA_CCP Verifying that CCP sees trade registered by Bank A VerifyTradeB_CCP Verifying that CCP sees trade registered by Bank B GetTradeA2 Getting updated trade of Bank A VerifyTradeA2 Verifying that status of trade has been changed GetTradeB2 Getting updated trade of Bank B VerifyTradeB2 Verifying that status of trade has been changed

Matrix structure for the running example

Exactpro Test Framework and Test Approach for a DLT-based system (Hyperledger) CCP Bank B Bank A Channel C Clearing request contract Clearing contract

The video begins with a demo of the case study, with the user interface (UI) of a post-trade DLT-based platform on the left and the ClearTH framework used on the right. The demo is followed by a detailed view of the transactions taken place in test execution in the Hyperledger Explorer UI. In conclusion, a test execution report is generated by the ClearTH framework for the running example. Please follow the link to watch the demo

19 Build Software to Test Software Confidential exactpro.com September 17 Leadenhall Building, London, 2019 Join us in discussing the newest fintech trends and solutions to the challenges in mission- critical trading and post trade systems! 19 SOFTWARE TESTING AND TRADING TECHNOLOGY TRENDS 2019

20 Build Software to Test Software exactpro.com