SmartStream adaptor automates TLM
SmartStream has extended the capabilities of its Trade Lifecycle Management suite with the launch of an adaptor. The adaptor will provide a full lifecycle of trading messages for the non-clearing OTC derivatives market and TLM Cash Management module for the front-office, which will provide a global real-time view of cash positions across all settlement channels by trading business line, portfolio, book and product.
SmartStream delivered the adaptor using technologies already in production with its TLM solutions.
The OTC derivatives product, TLM Collateral Management Adaptor, addresses requirements stemming from the risk mitigation standards for the non-clearing OTC derivatives market developed by the International Organisation of Securities Commissions (Iosco) and the Basel Committee. Firms dealing in non-standardised OTC derivatives will be in a similar position to clear derivatives and will be obliged to post both initial margin and need to understand which assets should be preserved for use as collateral and which are potentially available for trading.
“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,” said Darryl Twiggs, head of product management at SmartStream. “The heads of collateral operations have been requesting a solution… We have been able to use our TLM technologies to deliver the adaptor quickly.”
The TLM Cash Management module for the front-office addresses regulatory requirements of the UK’s Prudential Regulation Authority and the Financial Conduct Authority. These add further pressure on trading desks to understand their cash positions and manage risk in real time. Previously, front office traders used multiple end of day accounting platforms with no real-time visibility of daily positions. Now they need to view company and legal entity-wide aggregated positions by the minute in order to make comprehensive internal funding decisions, economically viable trading decisions and appropriately manage liquidity risk.