Misys has released a new collateral management solution, dubbed Misys Summit FT Collateral Management, which it claims is aimed at reducing counterparty risk. Against a background of increased market scrutiny of firms’ risk exposures via their counterparties, the vendor says the solution will provide real-time tracking and assessment of collateral levels.
The vendor is emphasising the ability of the solution to track these metrics in real time, which it says is essential as a result of last year’s high profile bank failures. The solution is available as part of Misys’ flagship cross-asset trading solution, Misys Summit FT, and provides a “one stop shop for analysis, assessment and control of exposures and net positions” in collateral management, says Dan Cohen, global solutions manager for the solution.
It claims to allow firms to better define underlying agreements, collateral eligibility and terms, and provide them with an integrated application to view, assess and manage the collateral process. The solution also enables firms to manage repo collateral and margins, calculate market valuations and margin on schedule or on demand. Additionally, it includes a range of valuation options aimed at improving valuations of derivatives positions and collateral requirements, says the vendor.
Cohen adds that the vendor has worked on expediting its implementation times for the solution: “We can now provide customers with a fully installed solution for managing collateral and counterparty risk in around three to four months.”
The issue of counterparty risk has been a big seller for vendors this year and many have been upgrading their offerings in this space. As Isabel Schauerte, an analyst at consultancy firm Celent, notes, it is one of the few areas that is garnering investment in a climate of cutbacks. “Solutions that help value and manage collateral on a near-real-time basis will be one of the areas of IT investment in 2009. The importance of the collateral management function within banks and hedge funds has grown in the last year and there is a broad desire for a single, integrated platform that allows for straight through processing of collateral management activities,” she explains.
According to Schauerte, this fits in with the requirement for increased transparency around post-trading pricing: “By consolidating multiple activities of the collateral management function into one system, a reduction of errors and inefficiencies can be achieved.”