SunGard has added a cross-enterprise collateral management and optimization solution to its collateral management suite. Apex Collateral helps banks, broker dealers and asset managers improve risk management, make the best use of their collateral assets, and support the shift towards central clearing of over-the-counter (OTC) derivatives.
Regulations such as Dodd-Frank, EMIR and Basel III are increasing the ratio of capital required to do business, while the migration to a centrally cleared model for OTC derivatives is escalating the demand for high quality collateral such as cash or government bonds. However, many financial institutions analyze data and make decisions about capital and collateral on a case-by-case basis within product and geographic silos.
Apex Collateral centralizes all elements of the collateral management process, from creating and maintaining a single, real-time inventory of collateral assets to trading collateral and managing operational requirements. Customers can view and manage collateral across assets, business lines and geographies, helping them increase efficiency and manage risk more effectively.
Numerical algorithms automatically calculate the optimal assignment of assets to collateral requirements, helping customers minimize the overall cost and maximize the use of valuable collateral. Flexible workflow tools help standardize how collateral is managed across a broad range of products, including all flavors of securities lending and repo as well as bi-laterally and centrally cleared OTC derivatives.
Rich Hochreutiner, global head of collateral trading and management at Swiss Re, said, “SunGard’s Apex Collateral solution helps us increase our effectiveness by providing a consolidated, big picture view of our collateral asset pool across OTC derivatives, reinsurance collateral, repo and securities lending. This transparency helps us mitigate counterparty risk while getting maximum value from our collateral assets.”
Andy Nybo, principal and head of derivatives research, TABB Group, said, “Adopting sophisticated tools to efficiently manage the collateral process on an enterprise-wide basis is an absolutely key requirement in today’s highly competitive environment. Being able to manage collateral in a more efficient and timely manner and within the trading process can help provide a significant competitive advantage.”
Craig Costigan, executive vice president and general manager in SunGard’s capital markets business, said, “With reduced liquidity and higher demands on capital, financial services firms are looking to maximize the use of all of their financial assets. SunGard’s Apex Collateral solution provides a centralized, up-to-date view of collateral across the enterprise and automatically calculates the most optimal assignment of collateral, helping firms minimize not only costs but the demand on their capital.”