Banks Deploy Post-Trade Technology

Terry Flanagan

Nordic Investment Bank taps Omgeo collateral management system.

Banks are aiming to lower counterparty risk and optimize capital via automated collateral management solutions

Nordic Investment Bank (NIB), an international financial institution of the Nordic and Baltic countries, has implemented Omgeo ProtoColl, an end-to-end collateral management solution for its OTC derivatives trades. The firm implemented and went live on the solution in less than three months.

“By eliminating manual processes, NIB is able to improve its internal and external collateral management processes,” Martin Loxley, director of collateral management at Omgeo, told Markets Media.

In addition, it is able to reconcile its OTC portfolios with counterparties, provide enhanced management of cash collateral, complete margin calculations and issue notices directly to counterparties, Loxley said.

“As with any firm, particularly AAA-rated banks like NIB, effective monitoring and management of counterparty risk is a critical part of their business,” he said. “With ProtoColl, clients gain tremendous insight into their firms’ exposures and risk profiles.”

Omgeo ProtoColl is an important part of Omgeo’s suite of cross asset post-trade solutions.  It provides an end-to-end, event-driven collateral and margin management workflow solution for clients to identify, negotiate and satisfy daily margin calls. The solution handles all margining requirements across OTC and exchange traded derivatives, FX, repos, securities lending, leveraged trading, emerging markets and loan facilities.

NIB’s adoption of ProtoColl comes at a pivotal time in the financial markets industry, where transparency in the derivatives’ trade process has become a significant regulatory focus area.

All OTC derivatives trades will be subject to timely confirmation, robust and resilient auditable processes, as well as frequent reconciliation and effective dispute management.

“Today, many firms are unable to gain an accurate, timely and consolidated view of their collateral and margin activity across all counterparties, introducing exposure and limiting the ability to maximize their use of available collateral,” said Loxley. “In most cases, this is due to disparate systems, processes and the lack of automation.”

ProtoColl addresses these issues by automating the collateral and margin management process, including the collation of all trade, collateral and market data, the calculation and valuation of all collateral obligations and requirements, and the effective communication with counterparties and custodians.

Related articles

  1. Trading Europe From ‘Across the Pond’

    Status grants clearing members clarity on the regulatory treatment of their exposures to OCC.

  2. The clearinghouses will be using a VaR methodology.

  3. Auerbach Grayson Launches U.S. Equities Trading Business
    Daily Email Feature

    FTX US Boosts Equities Business

    The US regulated cryptocurrency exchange has acquired Embed Clearing.

  4. BIS Warns on Asset Management

    'Crypto carnage’ has shown how meaningful protections for investors, markets, and the public are needed.

  5. Banks' Risk Management Seen as Lagging

    The enhanced margining model strengthens resilience and boosts capital efficiency.