Traders and compliance groups who want a full accounting of trade message traffic are now able to have a system designed to keep tabs on their activities in derivatives.
SmartStream, a financial Transaction Lifecycle Management vendor, announced the launch of TLM Collateral Management adaptor to provide a full lifecycle of trading messages for the non-clearing OTC derivatives market.
The International Organization of Securities Commissions(IOSCO) and the Basel Committee have developed risk mitigation standards for the non-clearing OTC derivatives market. Firms dealing in non-standardised OTC derivatives will be in a similar position to cleared derivatives and will be obliged to post both initial margin and variation margins when trading. Therefore trading desks, along with collateral managers, are keen to understand which assets should be preserved for use as collateral and which, potentially, are available for trading.
The IOSCO standards promote risk mitigation techniques to engage in effective management of counterparty credit risk and timely resolution of disputes. The TLM solution enables inflight identification of disputes and aids their resolution in real-time. This saves time, money, and plays a big part in managing non-clearing OTC cross boarder risk.
“Volumes in non-clearing OTC are predicted to rise by a factor of ten in 2016 following the implementation of new IOSCO regulations for intra-day margin call calculations. The heads of collateral operations have been requesting a solution,” said Darryl Twiggs, head of product management at SmartStream.