Clearstream launches trade simulation engine
For the first time in the Collateral Management sector, Clearstream is offering collateral givers the opportunity to simulate their trades and actively manage via a dynamic allocation simulator, CmaXDirect.
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Seven leading firms have agreed to participate to the pilot phase prior to the general release to the market in the first quarter.
CmaXDirect is a pioneering dedicated report reader / trade simulator. It is an MS Access-based module with a reader for the daily-exposure forecast report and a dynamic allocation simulator for collateral-givers. The Forecast simulator summarizes the available collateral position for each of the counterparties and allows a collateral giver to enter simulated trades to see the effect of these trades on his collateral position with all counterparties. CmaXDirect includes pending deliveries and purchases from main trading account as well as trades awaiting allocation. Concentration limits including dynamic margining are also taken into account. The quality of the data on ratings and pricing has also been substantially increased in order to give collateral management professionals the best possible knowledge of their portfolios and exposures.
This functionality will be possible across all Collateral Management Services where Clearstream acts as triparty agent including Triparty Repo, Triparty Securities Lending and any other exposure covered by more generic Triparty Collateral Management agreements. This new functionality is one in a series of product and service improvements to Cleastream's Triparty Collateral Management suite.
The European repurchase agreement ("repo") market is one of Europe's premier financing tool for both banks and broker dealers with a size of over €6.7 trillion in June 2007 according to the International Capital Markets Association (ICMA).
Clearstream pioneered the development of collateral management services, including triparty repo, in Europe by launching the world's first such multi-currency service back in 1993 and is now a key part of the infrastructure for the settlement and collateralization of repo and securities lending trades.
Clearstream's Global Securities Financing services, which include triparty repo, collateral management and securities lending, collectively experienced a rise of over 28 percent in 2007 compared to 2006.