TradingScreen's new risk management product helps FCMs comply with Dodd-Frank Title VII, providing real-time pre-trade client credit risk checks
TradingScreen Inc. (TradingScreen), the leading independent provider of liquidity, trading and investment technology via SaaS, today announced the launch of RiskHub to help Futures Commissions Merchants (FCMs) provide real-time credit checks to comply with Title VII of the Dodd-Frank Act.
Under Title VII, most swaps are now subject to mandatory clearing, and FCMs have just 60 seconds to perform real-time credit checks before their customers' trades are accepted for clearing by one of the OTC derivative market's central counterparties. In the US, mandatory trade reporting requirements have gone into effect for interest rate swaps (IRS) and index credit default swaps (CDS), and the volume of trades being centrally cleared has risen dramatically.
"TradingScreen's RiskHub Solution allows our clients to execute the required calculations in an instant," said TradingScreen CEO Philippe Buhannic. "Today, the credit check deadline is 60 seconds, but someday soon it could be even shorter. We are pleased to offer a solution that meets the tough requirements of today, and has also anticipated the regulatory developments of tomorrow."
RiskHub is a pre-trade risk compliance engine that allows FCMs to have instant control over executing broker limits. RiskHub gives FCMs access through the accept and deny process at various clearing houses, which cross over listed and centrally cleared derivatives.
TradeHub puts the checks where they belong: in real-time, at the point of trade.
"TradeHub is a super-fast, pre-trade system backed by the most sophisticated risk methodology available today, including VAR, risk factors, and SPAN," said TradingScreen CEO Philippe Buhannic. "RiskHub represents the next generation of risk technology, leapfrogging the current post-trade environment that has been the mainstay of the industry for the past few years."
RiskHub includes detailed risk analytics and reporting tools, providing a clear picture of each client's risk profile. RiskHub also provides scenario analysis to see how risk changes across the entire client base in varying market conditions.
"The timetable for the implementation of the European Market Infrastructure Regulation, or EMIR, is slightly behind Dodd-Frank, but regulators there seem to be moving in the same direction," said Philippe Buhannic, CEO of TradingScreen. "The new compliance realities have FCMs and other market participants scrambling to keep up. TradingScreen customers appreciate our cloud-based system, which keeps them on top of present and future regulatory changes, without forcing them to ramp up overhead or staff."