OMGEO nails it on collateral optimization, joins SunGard and 4Sight

A press release from OMGEO today said that the firm had upgraded its ProtoColl product to include a holistic view of their collateral management needs. This is what the industry needs, and OMGEO now joins the small group of technology providers including SunGard and 4Sight that say they can get cross-product collateral management right.

It is interesting to note the similar language that IT vendors are using when discussing their collateral management capabilities:

OMGEO: The newest ProtoColl enhancements… provide market participants with a single, holistic view of their collateral exposures across bilateral and centrally cleared (CCP) OTC derivatives trades, as well as exchange traded derivatives and other collateral-related transactions such as repurchase agreements and securities lending activities. Users can manage the entire collateral life-cycle with ProtoColl, allowing them to execute robust counterparty risk management procedures and demonstrate the results to regulators and investors. (OMGEO’s press release is here.)

SunGard: If you are a broker or intermediary, beneficial owner, hedge fund, asset manager or lender, Apex helps you to achieve efficiencies, drive down costs and optimize operations. Whether you are an existing or future client, implementing Apex is a strategically low-risk, high-reward decision.

– Take control of all your securities finance needs through one vendor
– Lower your total cost of ownership with global real-time positions management, flexible trade capture and support on one platform
– Gain a holistic view across multiple business entities, currencies and products

(SunGard’s Apex homepage is here.)

4Sight is slightly different but keeps to the same themes. 4sight Collateral Optimisation Features & Benefits:

Optimize collateral for Securities Lending, Repo, exchange-traded and OTC derivatives
– Allow the system to propose the collateral that meets your counterparties’ acceptance criteria with the lowest cost
– Gain clear figures for your actual and your optimal cost of collateral
– Run synthetic allocations and what if scenarios
– See allocation by sector, underlying client and usage breakdown
Comply with regulatory requirements more easily
– Identify surplus collateral
– Free up valuable liquidity

(4Sight’s collateral optimization page is here.

Congratulations to all three firms: the market spoke and all three have responded in a generally similar way in a reasonable time frame.

We haven’t done the review of each system’s capabilities to measure them up one by one but we are aiming to do that later this year. However, we know from experience that one man’s ceiling is another man’s floor – that is, each firm sees things a bit differently and collateral management is no exception. We look forward to seeing how these products play out in practice.

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