State Street Collateral+ partners with Cassini Systems to provide new analytics and optimisation capabilities

Through the new partnership, Collateral+ is looking to optimise margin and carry cost impact and provide the best trade route with the lowest cost as State Street eyes front-office benefits for the service.

By Wesley Bray

State Street Corporation has partnered with Cassini Systems to add pre- and post-trade optimisation and margin analytics capabilities to its Collateral+ service.

The move is the latest in a string of developments for Collateral+ which has stepped up its partnerships and developments in light of new global regulations.

The custodian said the partnership with Cassini will allow the integration of collateral and funding into the front-office decision strategy before the trades being placed.

According to State Street, through the addition of Cassini’s technology, Collateral+ can optimise margin and carry cost impact, providing the best trade route by identifying all possible ways to execute and clear the trade and highlighting the lowest cost.

In addition, Collateral+ offers margin optimisation as a post-trade utility with tools including novation and compression to lower margin and funding requirements.

True collateral inventory optimisation is provided by another module, which is based on clients’ collateral funding costs added with costs such as clearing fees.

The optimal placement of collateral and the lowest transaction cost routes are highlighted by this optimisation.

“As an industry, we have a long-held ambition to deliver collateral impacts and trade opportunities to the decision makers in the front-office. Our work with Cassini to develop Collateral+ to provide the intelligence and pre-trade knowledge to the desk is enabling State Street to deliver on this,” said Sam Edwards, head of Collateral+ in APAC for State Street.

“We are evolving with our clients and developing end-to-end tools and liquidity products in order to allow our partners to focus on their core strengths.”

State Street’s Collateral+ business has continued to gain momentum over the last few months.

In September, Collateral+ became operational on Acadia’s Initial Margin Exposure Manager (IMEM) and Margin Manager (MM) service, helping its clients comply with Uncleared Margin Rules (UMR).

In addition, Collateral+ integrated with DTCC’s Margin Transit Utility (MTU) in August, as a means of simplifying the transfer of collateral between buy-side firms.

“We are excited to partner with State Street on further enhancing the Collateral+ offering with optimization capabilities and analytics that can bring its clients substantial cost savings and a true understanding of front-to-back costs across the entire lifecycle of a trade,” said Liam Huxley, CEO of Cassini Systems.

“The ability to apply these analytics to the Initial Margin requirements of UMR is a powerful way to identify optimal counterparties and manage thresholds strategically with each and every trading decision.”

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