State Street has partnered with Cassini Systems to add pre-and post-trade optimisation and margin analytics capabilities to its Collateral+ service. This will enable the service to offer an integrated, modular approach to optimisation, which addresses collateral efficiency from several angles.
Through the addition of Cassini’s technology, Collateral+ can optimise margin and carry cost impact, providing the best trade route by identifying all execution avenues as well as clearing the trade and highlighting the lowest cost.
It can also offer margin optimisation as a post-trade utility with tools such as novation and compression to lower margin and funding requirements.
Moreover, together they will provide true collateral inventory optimisation based on clients’ collateral funding costs in combination with costs such as clearing fees.
Through the bank’s liquidity offerings, including Sponsored Repo and the newly launched Peer-to-Peer Repo, clients can leverage incremental cash and optimised securities revenues in order to effectively execute and grow their investments.
“As an industry, we have a long-held ambition to deliver collateral impacts and trade opportunities to the decision makers in the front office,” says Sam Edwards, head of Collateral+ in APAC for State Street.
He adds, “Our work with Cassini to develop Collateral+ to provide the intelligence and pre-trade knowledge to the desk is enabling State Street to deliver on this. We are evolving with our clients and developing end-to-end tools and liquidity products in order to allow our partners to focus on their core strengths.”
Cassini Systems CEO Liam Huxley says, “The ability to apply these analytics to the Initial Margin requirements of UMR (Uncleared Margin Rules) is a powerful way to identify optimal counterparties and manage thresholds strategically with each and every trading decision.”
State Street has been expanding Collateral+ functionality. It recently announced the became operational with Acadia’s Initial Margin Exposure Manager (IMEM) and DTCC’s Margin Transit Utility (MTU), which simplifies the transfer of collateral among market participants and allows clients to more easily comply with UMR guidelines.
©Markets Media Europe 2021
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