SmartStream Technologies, the financial Transaction Lifecycle Management solutions provider, announced a new solution, Eligibility API for collateral management optimization. It is a faster and more efficient way to get eligibility information contained within collateral agreements like CSA, GMRAs and OSLA’s, for both pre- and post-trade collateral optimization.
With the impending UMR (Uncleared Margin Rules) phase 6 regulatory regime being implemented in September 2022, volumes of margin calls are expected to increase and there will be an inevitable squeeze on assets being pledged as collateral. This will result in a rise in demand for High Quality Liquid Assets (HQLA).
In addition, with Interest rates forecast to rise – firms are looking at pre- and post-trade optimization so as to efficiently use scarce HQLA and cash. With this new solution SmartStream will provide firms with a way to publish eligible collateral for each legal agreement, which can then be consumed by their optimization engines.
To achieve optimization, a key component is the ability to access eligibility schedules from OTC and repo collateral systems quickly and easily. Seamlessly accessing what is eligible, and what haircuts apply to instruments across all agreements is fundamental. SmartStream’s new API allows fast and easy access to collateral, including the ability to upgrade seamlessly. In addition, the new solution allows the sourcing of eligibility information in real-time.
Jason Ang, program manager for Collateral Management at SmartStream, said in a statement: “We realise the UMR deadline is fast approaching, and we have made it easy for clients to deploy our new solution, and to manage future versions without the need for lengthy implementation projects. Furthermore, having a public API strategy, lowers the cost-of-ownership of the collateral solution. The demand for this new API is high and we are having conversations with the major banks on how they can use our eligibility to optimize their collateral in preparation for the future”.