August 22, 2013

Buy side firms that need to post collateral to meet margin requirements on OTC derivatives trades could find that new regulations are stressing their spreadsheets to the limit. But a full blown collateral management system could bust their budget.

Enter CloudMargin, a London-based firm that is launching a new, affordable-cloud-based OTC derivatives collateral management platform for buy-side firms. At a fraction of the cost, the London-based specialist collateral management software developer said its cloud-based platform offers an alternative to traditional spreadsheets that dominate the OTC derivatives market and user firms.

“Until now, much of the buy-side had been priced out of having a dedicated collateral management platform and had no viable alternative to spreadsheets,” commented Andy Davies, co-founder and CEO of CloudMargin, “I am thrilled that CloudMargin’s innovative approach and use of the latest cloud-computing technology means we can offer a full featured, full-cycle collateral and margin management platform that’s well within the reach of even the smallest buy-side firm.”

Launched in 2013, Cloud margin utilizes the efficiencies of cloud computing to offer a full-featured OTC derivatives collateral management platform for less cost than solutions from traditional technology companies.

CloudMargin is offering this new approach to a broad spectrum of buy side firms, from hedge funds and asset managers, pension fund managers and insurance companies through corporate treasury departments and energy firms. All of these firms are seeing collateral volumes surge and operational complexity soar while external and internal scrutiny of the collateral process has never been higher, states the vendor.

According to the release, it supports the full process of collateral and margin management, from storing CSA (credit support annex) parameter through calculating and issuing margin calls to handling disputes, selecting eligible collateral and instructing market movements, according to the release. Real time report and a unique dashboard bring a new level of oversight, the company said. At the same time, the firm’s solution supports the move toward CCP [central clearing counterparties], mandated by Dodd Frank and EMIR to gain a consolidated view of bilateral and cleared derivatives in a simple yet controlled process.

Even for firms that are below the thresholds for central clearing, new regulations under Dodd Frank and EMIR are taxing manual processes and bringing the use of spreadsheets to a breaking point, the firm asserts. CloudMargin is positioned as an alternative to spreadsheets so that firms can have a cost-effective, secure controlled collateral management operation.

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Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...