Sophis launches stock lending and repo module

Source: Sophis

Sophis, a leading provider of cross-asset, front-to-back-office solutions, today announced the launch of a securities lending and repo module.

As follow-up to the collateral management module launched last year, Sophis' securities lending and repo module is designed to enhance straight-through processing (STP) throughout the entire cash and securities financing chain, improve risk control and optimise collateral. This module extends financing possibilities and provides specialised front, middle and back-office functionalities, including:

  • Front Office: Global view of assets' availability, access to all known market practices and related pricing (multi-currency lending transactions, coupon rebates, all commissioning models including feemarks, etc.)
  • Middle Office: Cross-asset and stock lending collateral management, high usability of the securities and cash margining process, real-time control of exposure per agreement based on effective settlement events instead of forecasted events
  • Back Office: Automated settlement/payment process, tri-party reconciliation, real-time P&L and billing computation

The new module meets the increasingly sophisticated needs of market participants involved in securities lending and borrowing and collateral optimisation. The 2006 margin survey issued by the International Swaps and Derivatives Association (ISDA), states that collateral in use grew by ten percent from 2005 to 2006 to $1.33 trillion. In addition, the number of collateral contracts in circulation grew to 109,733 in 2006 - a 55 percent increase.

IXIS Corporate & Investment Bank, a leading securities lending player with over 50,000 deals a year and a subsidiary of Groupe Caisse d'Epargne, is a development partner and user of RISQUE's newly launched securities financing module.

Etienne Bur, Global Head, Equity & Arbitrage, IXIS Corporate & Investment Bank says, "As our equity finance business continues to grow, we handle increasingly complex cross-asset products, thousands of margin calls daily, and have to mitigate against growing counterparty credit risk issues. It is critical we have a system we can rely on to effectively manage all of our collateral positions and contracts. Sophis was a natural partner as we have been working with them on the equity derivatives business for years now, and all our positions are already in the Sophis Database. We are excited about the true front-to-back architecture, efficiency, improved risk control and reduction in costs Sophis' stock lending and borrowing module brings to our securities financing activities."

Hervé Vinciguerra, Chairman, Sophis, says, "As financial institutions look to centralise and rationalise their cash and securities financing activities to reach a critical mass in a small margin business, they require a comprehensive front-to-back office solution for all aspects of this business - from negotiation through collateral management to billing. Sophis has spent a substantial number of man hours on the creation of this module and that, coupled with our IXIS Corporate & Investment Bank partnership, positions us as having one of the strongest and most flexible offerings on the market."

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