4sight Financial Software has added new features to its Collateral Optimisation system. This allows users to automate collateral recalls and substitutions based on:
Corporate actions
Changes in collateral credit rating leading to it becoming ineligible
Changes in counterparty and CCP eligibility criteria
Recall requests by underlying clients leading to a short position
The collateral management system can base all collateral substitutions on automated cheapest to deliver collateral optimisation algorithms.
This allows users to identify and process multiple returns and recalls for multiple counterparties (bilateral, CCP or triparty) from a single screen. It helps to automate a process that typically involves significant manual effort for collateral managers.
The system can also help users to see when pledged collateral is no longer cheapest to deliver and can propose suitable reallocations.
Martin Seagroatt, 4sight’s Head of Marketing comments: “collateral substitution is one of the biggest operational headaches of the collateral management process. We developed new automation around this process to reduce the level of manual effort involved, while also minimising collateral costs through intelligent asset allocation.”