Amsterdam-based asset manager Kempen Capital Management has implemented Omgeo’s ProtoColl to automate collateral management for OTC derivatives and reduce counterparty and operational risk.
The asset manager first outsourced collateral management before bringing it back in house and creating a Microsoft Excel spreadsheet solution that has now been replaced with ProtoColl. The software went live in September 2011 and is integrated with the firm’s investment management system to manage all OTC derivatives collateral management. This is not the asset manager’s first brush with Omgeo, it is already a user of the vendor’s Central Trade Manager for equities trading.
Returning to collateral management, Pascal Kolk, derivates operations specialist at Kempen, explains: “When a process is really important to your firm, you tend to want to manage the process in-house so that you can retain knowledge and control. We had a clear idea of what we needed from a collateral management solution. When we compared the functionality of Omgeo ProtoColl to other collateral management applications, ProtoColl was the best match.”
Martin Loxley, director of collateral management at Omgeo, adds: “Collateral management for OTC derivatives needs an automated solution including a strong audit trail. The risk benefits are reduced counterparty and operational risk, while automation improves efficiency.” Kempen has implemented ProtoColl in-house, but it is also offered by Omgeo as a hosted service and to date has won 20 users worldwide.
Ahead of forthcoming European and US regulatory requirements for OTC derivates to be cleared centrally, Omgeo is enhancing the central clearing element of ProtoColl and preparing to release more functionality and enhancements for the software in the second quarter.
These include more detailed reporting of information related to different forms of derivatives and where they are being cleared, integration of ProtoColl with additional direct clearing members to support automation of collateral management, and enhancements to the ProtoColl dashboard to deliver more granular but easy to understand management information.
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