Omgeo has extended its automated collateral and margin management services to include collateral optimization capabilities.
The added functionality of Omgeo ProtoColl addresses the need for financial services firms to enhance existing asset inventory in light of emerging initial and variation margin collateral requirements imposed by the Dodd–Frank Act and European Market Infrastructure Regulation (EMIR).
The possibility of a collateral shortage faced as a result of Dodd-Frank and EMIR, whose central clearing mandates call for increased margin and collateral requirements, means firms’ existing asset inventories need to be maximized efficiently to meet those regulatory requirements and to decrease costs and risk.
With Omgeo ProtoColl, firms can manage their margin and collateral calls across their entire trading operation. ProtoColl’s collateral optimization functionality, designed specifically for asset managers, allows users to create rules-based algorithms as well as define preferences and rules for determining the quality and importance of various forms of assets to be used for collateral. The service recommends which assets to use, and determines a usage priority based on those preset rules.
ProtoColl’s latest version also includes a browser-based management dashboard, giving users a real-time view of collateral management activities, including collateral dispute status, uncovered exposure and counterparty risk positions.
Additional enhancements to ProtoColl include support for the Legal Entity Identifier (LEI) and the CFTC Interim Compliant Identifier (CICI) and reference agreement functionality that simplifies the process of setting up and maintaining existing agreements with counterparties.
Cubillas Ding, research director at industry analyst firm Celent, said: “As firms face an increasing crunch in the supply of high-quality collateral, it will become increasingly important for firms to ensure that they squeeze out and maximize operational efficiencies through the intelligent deployment of automated collateral management solutions. Making smart and timely decisions around the sourcing and placement of collateral has never been as critical as it is now.”