In addition to reviewing Version 4, leading collateral practitioners from across the globe have assembled in Barcelona to discuss a wide range of industry issues, including agreement on a common reconciliation standard for exchanging information between clients. Consistent with ISDA directives, Algorithmics and its clients continue discussion on the role they can play in advancing the standards' debate, with Algorithmics providing key tools to assist users in resolving position and valuation differences.
Other topics to be discussed in detail at the conference include the leveraging of advanced collateral techniques to expedite evolving, collateralized trading businesses such as foreign exchange (FX) margining, security lending and other aspects of capital market operations.
Building on the award-winning Mark-to-Future methodology, the latest version of Algo Collateral (Sentry) is the first step in integrating the advanced simulation tools of Algo Suite to provide the most comprehensive collateral management functionality of any offering offered today. Sentry Version 4 builds on the superb reputation of Algo Collateral (Sentry) to record and track master/collateral agreement information, and calculate margin call requirements, while monitoring the status of collateral obligations, collateral inventories and management information. Recent client input and feedback from this week's Sentry User Conference has been extremely positive, signaling that the latest version of this product represents a major advance for collateral management programs.
"With the increasing need for effective collateral management solutions in the world's financial institutions, we are pleased to offer a superior solution that surpasses the basics currently offered in the industry. The launch of our latest version of Algo Collateral (Sentry) provides clients with the strongest foundation possible for superior collateral management, integrated with other products, including credit risk products, from Algorithmics," says David Wechter, Director, Algo Collateral (Sentry).
Important new features include a second generation of Sentry's rehypothecation /re-use feature that allows for the automatic allocation of collateral to margin calls, based on user-defined preferences. Clients now have complete control to override old preferences, pay specific attention to a particular call's requirement, while viewing all eligible collateral available-
for-delivery for that counterparty's margin call.
Algo Collateral (Sentry) continues to proactively address inherent difficulties in managing the composition and opportunities within the flow of a collateral program. Most notably, Algo Collateral (Sentry) Version 4 includes asset management support that allows the interrogation of a collateral/available assets portfolio. With this asset management utility, an institution can glean insightful views into its collateral program and identify potential shortages caused by excessive internal borrowings, thereby enabling fast and accurate analysis of its current collateral portfolio.
Similarly, as financial institutions show a greater need for improved control over data changes, Algo Collateral (Sentry) has introduced a "4-Eyes Principle" as an optional data entry mode. This feature provides firms with increased security over the authorization and manipulation of data entries. Additionally, the newly-featured analytics module tool - known as the 'What-If Scenario' generator - enables users to create different credit rating scenarios to investigate the effect of changes in the firm's and/or counterparty's rating and resulting liquidity/collateral needs.
Improvements to oSentry, the business object foundation of the Algo Collateral (Sentry) system, continue to generate interest as clients move to implement straight-through processing in their collateral operations. Mechanisms now facilitate the monitoring of collateral through the workflow, specifically to settlement systems. Moreover, oSentry now exposes its core business objects to clients, allowing them to take advantage of code already written to perform standard procedures - a key offering for those interested in custom-functionality development.
It is anticipated that most Algo Collateral (Sentry) users will upgrade to Sentry Version 4 in 2002. Already, Algo Collateral (Sentry) has established a sizeable user-base and is recognized as the pre-eminent collateral management solution among leading financial institutions.