Calypso launches collateral optimisation solution
29 June 2011 San Francisco
Image: Shutterstock
Calypso Technology has developed a collateral optimisation solution specifically designed to address major functional gaps in the industry. The new software product is among the first in the industry that directly responds to new challenges in collateral management driven by substantial shifts in the basis markets, regulatory requirements for OTC clearing and associated margins, improved counterparty risk management, more stringent liquidity control, and demand for greater visibility at an enterprise level.
“The Calypso solution truly solves the many dimensions of the collateral optimisation puzzle, whether the requirement is short-term tactical or long-term strategic,” stated David Little, director, strategy and business development at Calypso Technology.
A key component of the solution is a proprietary algorithm that allows users to intuitively manage the collateral allocation process. Firms can rapidly deploy optimization strategies by simply defining substitution rules, targets, constraints and real-time information governed by traders. Alternatively, users can plug in their own proprietary solvers. Key benefits include:
▪ Reduced costs for collateral management through improved decision-making
▪ New business opportunities; e.g. collateral processing services
▪ A global view of counterparty risk and operational efficiencies
▪ Enhanced reporting and control levels
▪ The front office can configure optimisation algorithms and explore opportunities without any additional operational burden for the back office margin call process
The system provides clear overviews of positions, collateral requirements and allocations. Other functionalities such as the ability to analyse the cost of funding/collateral at the trade level and collateral netting enables businesses to reduce operational costs and to allocate associated transaction costs.
The solution is aimed at both buy and sell-side organisations that are looking to manage their collateral management more efficiently and in real-time. It is integrated with Calypso’s proven and leading trade management platform, and leverages Calypso Fast-Track for rapid deployment.
“Collateral management is now a very different game as businesses have become more focused on real-time collateral valuation and availability,” commented Little. “The collateral management team has become an integrated part of the front office team, driving business decisions that are made based on real-time market data. This allows the business to be responsive to changes in the market and adapt to new collateral requirements quickly Calypso Technology has again delivered to the market an innovative solution that directly responds to the demands of a dynamic and structured OTC derivatives market landscape.”
“The Calypso solution truly solves the many dimensions of the collateral optimisation puzzle, whether the requirement is short-term tactical or long-term strategic,” stated David Little, director, strategy and business development at Calypso Technology.
A key component of the solution is a proprietary algorithm that allows users to intuitively manage the collateral allocation process. Firms can rapidly deploy optimization strategies by simply defining substitution rules, targets, constraints and real-time information governed by traders. Alternatively, users can plug in their own proprietary solvers. Key benefits include:
▪ Reduced costs for collateral management through improved decision-making
▪ New business opportunities; e.g. collateral processing services
▪ A global view of counterparty risk and operational efficiencies
▪ Enhanced reporting and control levels
▪ The front office can configure optimisation algorithms and explore opportunities without any additional operational burden for the back office margin call process
The system provides clear overviews of positions, collateral requirements and allocations. Other functionalities such as the ability to analyse the cost of funding/collateral at the trade level and collateral netting enables businesses to reduce operational costs and to allocate associated transaction costs.
The solution is aimed at both buy and sell-side organisations that are looking to manage their collateral management more efficiently and in real-time. It is integrated with Calypso’s proven and leading trade management platform, and leverages Calypso Fast-Track for rapid deployment.
“Collateral management is now a very different game as businesses have become more focused on real-time collateral valuation and availability,” commented Little. “The collateral management team has become an integrated part of the front office team, driving business decisions that are made based on real-time market data. This allows the business to be responsive to changes in the market and adapt to new collateral requirements quickly Calypso Technology has again delivered to the market an innovative solution that directly responds to the demands of a dynamic and structured OTC derivatives market landscape.”
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