Comyno welcomes all readers to the year 2021 and talks about its vision for the innovative platform C-One and its successes in the area of blockchain technologies
Image: Comyno
Vision: accomplished! what’s behind this?
First of all, we wish all readers a good and successful start to a new and exciting year, 2021.
Our vision has been and will be to support the securities finance markets to become more efficient and more profitable for our customers. To achieve this, our firm strives to solve not only specific client problems but has always also driven business and technology trends affecting the market as a whole.
To explain the ‘Vision: Accomplished’ slogan, let us look back to 2016, where Markus said to SFT in course of an interview: “I expect there to be a time of coexistence between the legacy world and blockchain/distributed ledger infrastructures. We have already shown that we are able to support the transition with our ready-for-blockchain software. As we are connecting legacy market infrastructures with C-One, we can act as the ‘enabler’ to move from the current to the future world, step by step. Investment in the current experiments will pay-off for Comyno and the wider markets.”
Now, at the end of 2020, we are in the foreseen position:
Within our C-One Securities Finance solutions, we merge the worlds of securities lending, repo and collateral management for ‘traditional’ and digital assets. Having connected C-One not only to traditional market participants, but also to most common blockchain and distributed ledger technology (DLT) infrastructures, such as Corda, Stella and Ethereum, we enable issuing and settlement of digitised traditional securities and native digital assets.
Figure 1
Consider the following: You and your client or counterparty could now manage a locate request, agree the terms of a lending trade, set-up or use a collateral schedule which could comprise traditional and digital assets, settle the transaction as a whole and, with our Securities Financing Transaction Regulation (SFTR) regulatory reporting (including delegated) functionality, report the trades to the
trade repository.
All this with a few clicks in one system and within a minute! And above all, already proven in production environments (see figure one).
Your focus in the past was on business consulting activities. Nowadays you are also running a company with its own software. An unusual combination, what can you tell us about that?
Basically, Comyno started in year 2006 as a pure consulting firm. It was, however, always our vison to bring new technologies and up-to-date solutions to the securities finance area, that traditionally was always lagging behind new evolutions. We actually see this as a fantastic combination: Using, together with our clients, the market and business expertise to form a software product, which delivers superior solutions for the clients is a great combination. You work closely together with the IT colleagues and can make an immediate impact on the software. You see the clients’ needs being on the ground, combine this with the own experience plus the input from your other consulting colleagues and create a great solution. You can pre-empt challenges and deliver early solutions. It does not get better than this.
Could you tell us more about your software solution C-One?
The innovative C-One suite offers a complete solution for securities finance trading and collateral management, covering the complete value chain of the corresponding transactions.
It is built as a ‘hybrid platform’- incorporating features for an in-house trading and collateral management system, a multi-entity and multi product platform across asset classes. This enables our clients not only to manage their whole securities finance business with C-One, but also grants online access to and for their clients and counterparts including white-labelling potential simply via web.
C-One provides seamless possibilities for position sharing, locates management as well as affirmation processes. Furthermore, clients and counterparts can see ‘their side’ of the trading activity as well as ‘their side’ of the collateral and exposure management. Even the profit and loss features can be used by all entities with access to the platform.
So, blockchain is not the only innovation?
One of the biggest cost drivers for the industry is the multitude of internal and external parties involved in securities finance transactions. The variety of software systems and IT components as well as a big number of manual workarounds and interfaces which are necessary to fill gaps lead to high inefficiencies.
Comyno has done no less than tackling this industry challenge for the benefit of our market with its solution: C-One with all its different modules is now covering the whole value chain, both from a business and technical perspective.
To stick to our ‘one-stop shop’ slogan, we included a SFTR reporting capability in 2020 into our product. As all our other functionalities, this was again built on a modular approach. The SFTR functionality can be used as a stand-alone tool connected to your in-house systems, or out-of-the-box for firms already using our full enterprise suite.
C-One provides out-of-the-box but modular and configurable connectivity to the securities finance market players combined with covering repo, securities lending, derivatives and collateral trade flows to fully automate a modern securities finance desk including regulatory reporting out of one hand.
What module or tool of C-One do you see as important to have for a modern trading desk?
We actually see the locate manager as a necessary tool to at least start with. Structuring something that is only available unstructured and very diverse is great. There are thousands of emails with single or multiple security requests being spread every day. Every sender has his own way of putting the request with sometimes more, sometimes less information.
Figure 2
No trader is effectively able to handle these requests efficiently by reading the email, extracting the relevant data, comparing it security-by-security against the available inventory. When inventory was identified, to look up a current reference rate for a potential lending trade, making its own evaluation on the offer price and finally giving a response. Hence, multiple time-consuming steps for often a little revenue. Only scanning cursory for the requested securities might not consider some actual ‘treasures’ in the ever-changing inventory, no one is aware of.
Comyno’s locate manager is hence a very powerful tool for both sides: The potential lender is improving the utilisation of his inventory and increasing his revenues. On the other hand, the requesting entity has an improved chance of finding securities in the depth of the pockets of its trading network. The traders can focus on concluding the trade itself or more complex activities, while the laborious, time-consuming tasks are covered by the locate manager.
The installation of the C-One Locate Manager does not even require the implementation of a complex, much larger system environment. The dedicated module can be installed with limited interaction with existing technological framework of the lending desk – just basic static data, the available inventory and a connection to the email server to begin with. It generates a benefit already with limited efforts, and it can be further integrated into the overall architecture, if required.
Having achieved all this, what´s next on your agenda?
The emerging field of digital assets paves the way for us to add further modules to cover the full ‘digitised’ lifecycle – from issuing, registration and investment to asset management and secondary markets.
Within the next few weeks, there will be further news published together with our clients and partners explaining in more detail what we have already achieved.
That news will kick-start 2021 for us, and we are happy to start and continue discussions with interested banks, asset managers and all other parties interested in innovation and how to make profit out of it.
Pan Asia Securities Lending Association Valerie Rossi
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