To better serve its stakeholders and the users of the US equity options and futures markets, OCC, the world’s largest equity derivatives clearing organization, announced the Renaissance Initiative, a multi-year investment to comprehensively redevelop and modernize the company’s risk management, clearing and data systems.
Risk management: the internally developed risk platform elements of the Renaissance Initiative build upon the program already underway at OCC with many features operating on cloud infrastructure. The Renaissance Initiative will provide an environment for intra-day risk management, intra-day computations, pricing and re-valuation. It will enhance the efficiency and speed of margin, stress-testing and back-testing capabilities. The Renaissance Initiative also will increase transparency and insight for clearing members into exposures via ad hoc queries and real-time processing.
Clearing systems: following a lengthy and rigorous analysis, OCC has decided to use a combined approach, pairing internal work with the adoption of the TRADExpress Real Time Clearing (RTC) solution developed by Cinnober, which is being acquired by Nasdaq following completion of its successful tender offer. The solution delivers several benefits for OCC and its clearing members and participant exchanges, including enhancements to: ad-hoc reporting with new filtering functionality, control mechanisms throughout systems, application programming interfaces (APIs) that will make it easier to procure and submit data to and from the system, a functionally easier process to introduce new products, enhanced industry-standard futures processing (including Average Price Reporting and give-ups), and processing of clearing member trade agreements.
Data platform: will be independent from its clearing and risk systems and comprehensively address OCC’s historical data limitations. The Renaissance Initiative will build a proprietary data model to support OCC’s business that is separate and distinct from its current technology solution. OCC will have self-service capability for data discovery, search, and historical analysis. It also will have a scalable and secure centralized enterprise repository that can serve data to concurrent processing needs, including report generation, back-testing, and stress-testing.