CCP – clearing

It is increasingly difficult for firms to manage collateral operations using spreadsheets or to access stretched in-house IT resources to develop solutions to meet the risk, regulatory and operational controls that have come about to minimise risk post-financial crisis.

Download a COLLINE CCP Clearing brochuresContact us for more information on COLLINE collateral management and related issues >>

Download a COLLINE collateral management brochure >>

Download a COLLINE CCP/Clearing brochure >>

In a drive to minimise counterparty risk the volume of collateralised trades is on the increase. 70% of OTC exposure is collateralised now -  compared to 59% and 30% in 2007 and 2003 respectively.
Government and regulatory bodies are driving towards OTC derivatives to be cleared through central counterparty clearing houses (CCPs) to further minimise risk.

The CCP landscape is complicated – Lombard Risk’s COLLINE CCP/Clearing module meets all the business requirements now, and will continue to do so in the future!

 

 

 

The Lombard Risk COLLINE CCP/Clearing module is already in use at two major Tier 1 banks:

  • is tried and tested having been available since 2009
  • incorporates significant and rich functionality
  • is constantly enhanced to meet new requirements

The COLLINE CCP/Clearing DASHBOARD:   The reconciliation and exception monitoring tool is at the heart of the COLLINE CCP/Clearing module – reflecting the discrepancies between present valuations – and primarily allowing the firm to monitor their own marks while comparing them to those of the clearing house.  With full drill-down capability to the underlying data to assist investigations.

The COLLINE CCP/Clearing WORKFLOW: The CCP/Clearing workflow in the latest version of COLLINE, which is fully configurable, enables firms to group agreements together by clearing house and/or client in order to manage clearing business more efficiently.

More key features:

  • For clearing and non-clearing members alike, COLLINE calculates the margin requirements for agreements between the principal and the clearing house or clearing broker, as well as manage the agreements with clients (if offering a client clearing service).
  • COLLINE takes in MtM feeds from the relevant clearing houses to perform the variation margin requirement calculations, and provides comparisons between the firm’s MtM calculations and those of the clearing house to highlight possible discrepancies.
  • COLLINE supports intra-day margining.
  • COLLINE supports many different independent amount (IA) calculations and takes an IA feed directly from the clearing houses.
  • COLLINE automatically books collateral payments and receipts for CCP agreements – alleviating the need for users to manually book collateral, which is time-consuming, and potentially miss tight CCP deadlines.
  • Margin calculations can be configured to meet the individual clearing house’s specific calculation requirements.  COLLINE already supports LCH, ICE, CME and SGX margin calculations, and are in discussions with other clearing houses.
  • Full Master Netting functionality, which enables grouping and netting together of specific agreements, is available.   Firms offering a “client clearing service” are able to group agreements by client, including not only the different CCP agreements but also the existing bilateral ones, and will net the margin requirements, generate consolidated margin calls, allow for netted settlements and provide consolidated reporting.