Periodic Reporting for period 2 - TRADECC (TRADExpress Client Clearing)
Reporting period: 2016-01-01 to 2016-09-30
Disruptive innovation in multi-asset client clearing and real-time risk margining
Investment banks are facing unprecedented challenges, including pressure to reduce costs and deal with large-scale regulatory changes that have great impact on their clearing business. In addition, many have the burden of managing legacy IT infrastructures, often multiple system silos implemented over many years, which have led to inefficient and costly operations.
Cinnober’s TRADExpress Client Clearing is a revolutionary clearing solution offering straight-through processing from trade capture all the way to settlement. This multi-asset, real-time solution enables banks to integrate all their clearing flows, OTC as well as exchange-traded, in a single system, supporting operational efficiency and giving a comprehensive view of risks across asset classes.
Tried and tested at some of the world’s most demanding clearing venues, TRADExpress Client Clearing offers extreme performance, and brings true innovation to post-trade and clearing operations.
• Integrates and normalizes all clearing flows; OTC and exchange-traded; multi-asset and multicurrency
• Delivers streamlined straight-through workflow and exception handling, from trade capture to settlement
• Real-time risk management with pricing of instruments, valuation of portfolios, risk margining with stress testing, back testing, and what-if scenarios
• Real-time monitoring of a clearing bank’s risk exposure towards both its clients and the CCPs
• Conforms to the new regulatory requirements for collateral segregation, including ISA, OSA and LSOC, and management of excess collateral
• Service-based offering reduces the burden on business and IT operations
The action was successfully concluded, all deliverables and milestones where reached.
Functional overview an results
Trade capture & connectivity: Offers connectivity, normalization and reconciliation across a large number of trading venues and clearinghouses, in different time zones for a wide spectrum of asset classes, in multiple currencies. Streamlined straight-through workflow and exception handling, from trade capture to settlement.
Trade & position management: Trades and positions can be monitored and managed in real time via a web interface and API. It is also possible to set rules to perform automatic actions. All trade and position management functions are covered, including bunched trades, allocations, give up/ take up, and many more.
Real-time risk management: Facilitates real-time risk management with pricing of instruments, valuation of portfolios, risk margining with stress testing, back testing, and default fund management. Supports multiple simultaneous risk models and cross-asset margining. Shows risk exposure towards both clients and the CCPs in real time. Offers ability to replicate CCP margin calculations based on SPAN® and VaR, and allows clients to perform what-if evaluations.
Collateral management Management of collateral and margins in multiple currencies, reducing the reserved capital requirements by crossmargining between markets, referenced to a single base currency. Conforms to regulatory requirements for collateral segregation, including ISA, OSA and LSOC, and management of excess collateral. Supports transfers of cash and non-cash collateral in multiple currencies. There is no restriction on what collateral instrument types can be managed.
Settlement: Flexible and configurable settlement logic provides both gross and net settlement of cash and securities. Handles cash settlement for both payments and collateral. Transfers available via API or file transfer. Communicates with settlement and payment systems via SWIFT-standard and proprietary gateways.
Reporting: The report generator can be used for creating tailored reports for multiple purposes. A report may be generated at pre-determined intervals or on an adhoc basis. The reports are disseminated via web or fed to downstream systems. Supported formats include PDF, Excel, and CSV.
To reduce the burden on our customers’ internal IT and operations staff, TRADExpress Client Clearing is primarily offered as a software service solution, operated and managed 24/7 by Cinnober’s dedicated support teams. With its flexible and modular system architecture, this solution can cover the bank’s entire post-trade flow, across all asset classes and markets.
TRADExpress Client Clearing leverages Cinnober’s world-class CCP clearing technology, delivering a high-performance, realtime platform that is asset-class agnostic. The solution can be readily scaled to handle millions of accounts for thousands of clients having millions of positions. It can also handle millions of trades per day with hundreds of trades per second for a single instrument, while still being able to disseminate position updates within milliseconds. Our unique account model and risk calculation models allow risk managers to rapidly visualize the firm’s risk and collateral accounts, provide real-time insight into its exposure, as well as the ability to react to changes in this volatile and complex trading world.