Streamlining Collateral Management Post-Dodd-Frank

Terry Flanagan

Post-trade provider Omgeo has launched partnerships with TriOptima and AcadiaSoft to extend straight-through processing (STP) for users of Omgeo ProtoColl, its automated collateral and margin management solution.

In response to global regulations that require firms to reconcile OTC positions on a regular basis, including Dodd-Frank and the European Market Infrastructure Regulation (Emir), Omgeo ProtoColl will directly interface with TriOptima’s triResolve, aleading portfolio reconciliation service. By linking ProtoColl to triResolve, users can manage their entire collateral management process in ProtoColl, and then automatically reconcile their over-the-counter (OTC) positions.

“Reconciliation is a critical component in reducing margin call disputes, and increases the accuracy and automation of the daily collateral activity,” said Rick Enfield, executive director of ProtoColl product management at Omgeo. “ProtoColl users now have direct access to data pertaining to position variances with their counterparties in advance of the collateral process.”

As part of the daily counterparty reconciliation, the interface will ensure TriOptima has the most up-to-date OTC position information about ProtoColl clients and their counterparties, along with the associated contractual information. Designed to streamline the reconciliation and collateral management processes, the interface reduces the amount of time necessary for dispute management and lowers risk exposure.

“Greater integration between collateral and reconciliation processes leads to faster and more efficient resolution of discrepancies. By linking TriOptima to ProtoColl, users benefit from lower risk of error and operating costs as well as improved credit risk mitigation,” said Raf Pritchard, CEO of triResolve.

Omgeo is also introducing an interface with AcadiaSoft MarginSphere, a margin confirmation service. By linking to MarginSphere, ProtoColl clients can electronically communicate margin information between counterparties, and agree on margin call amounts.

Separately, CACEIS, an asset servicing banking group with assets under custody of €2.5 trillion, has launched Collateral Express, an integrated collateral management produc.
With the implementation of regulations such as Emir, Dodd-Frank and Basel III giving rise to the systematization of collateral and greater demands on quality and liquidity, CACEIS has honed its expertise in the field of collateral management.

“With Collateral Express, CACEIS now offers its clients a global and consolidated view of their collateral by counterparty, irrespective of whether the underlying assets are OTC derivatives, forex, listed derivatives, securities lending or Repo, etc.,” said Laurent Durdilly, CACEIS products and solutions director. “Collateral Express is the solution for optimizing a resource that has become critical for the functioning of the financial system and for our clients.”

Fully integrated with CACEIS’s Asset Servicing offering, Collateral Express offers access to electronic affirmation platforms to reduce confirmation time frames; systematic, daily, independent valuation of all OTC instruments, from plain vanilla to complex products and regular reconciliation with counterparties according to frequencies defined by the regulators.

It also includes access to clearing houses via clearers; reporting of transactions to Trade Repositories from the following day; calculation and regular reconciliation of margin calls; management of collateral in the form of securities or cash and combined reporting of cleared and bilateral transactions.

Related articles

  1. Buy-side veteran has been instrumental in building out a best-in-class trading analytics framework.

  2. AllianceBernstein plans to expand its ETF suite, particularly in equity and multi-asset.

  3. UK-focused funds had second-worst outflows on record.

  4. CEO says he remains confident in the organic growth potential of the firm.

  5. European Commodity ETFs Have Record Inflows

    The asset manager aims to grow its Xtrackers and passive business globally.