Principia Partners, the leading solution provider for the management and administration of structured finance operations, today announced the availability of Principia SFP (Structured Finance Platform) Version 5.2.
The new release delivers enhanced, market-ready functionality providing a framework for due diligence, risk oversight and operational control of both on- and off-balance sheet structured finance portfolios. These fully automated workflow processes completely integrate all stages of the portfolio lifecycle, from trade capture to accounting.
The release comes at a time when organizations, such as the International Monetary Fund (IMF), Basel Committee, International Accounting Standards Board, and the Senior Supervisors Group are making market-wide recommendations on operating guidelines to maintain the future stability of the structured finance industry. April's Global Financial Stability Report, published by the IMF, outlines financial institutions' and regulators' under-appreciation of systemic risk as the use of structured finance has flourished in recent years. The report identifies the challenges of off-balance sheet risk transfers and the subsequent return of assets back to the balance sheet of banks.
SFP V5.2 is designed to help structured finance portfolio managers adapt to this changing industry environment, whether they operate in bank treasuries, off-balance sheet vehicles or alternative investment funds. As the ownership of complex assets is redistributed, buy-side players are increasingly under pressure from internal management, industry participants, external investors and regulators. These parties are increasingly demanding proof of ongoing portfolio surveillance and comprehensive fiduciary risk management, integrated into an environment with strong operational controls. The new version of Principia SFP provides a core structured finance platform to manage these portfolios, setting workflow parameters from inception, through credit approval and surveillance, to accounting. By consolidating all the required data and using pre-defined 'workflow rules', SFP V5.2 provides managers with an out-of-the box operational backbone. bone. This is combinedded with a tool capable of monitoring global risk exposures within a single consolidated software platform.
"In the past, the treatment of ABS and MBS assets in bank treasuries has been a highly manual process with deal-capture, accounting and monitoring carried out by disparate bespoke systems. This is no longer sufficient. Version 5.2 will provide our clients with a single environment and a set of workflow processes which mitigate operational risk and ensure adherence to compliance requirements. In addition, the product's flexibility allows managers to adapt the system to meet any new compliance reporting, accounting or operational needs as the market evolves," states Douglas Long, EVP Business Strategy, Principia.
With off-balance sheet asset exposures moving onto the balance sheet, financial organizations face the challenge of attaining transparency into all of their investments. "Before the liquidity crisis, sophisticated portfolio management techniques were primarily required by highly leveraged off-balance sheet vehicles. Rating agencies imposed strict surveillance, operating guidelines and compliance requirements. Now industry bodies have recommended the integration of these techniques into the management and administration of structured finance portfolios. Principia supports this transition and the company's technology and expertise will help create a stable, safe and standardized operating environment for our clients," continued Long.
Principia SFP V5.2 is available immediately and can be offered either as a stand-alone system or an upgrade for existing SFP users.