As credit and liquidity have become restricted in the current financial crisis, financial institutions participating in repo transactions need to be able to effectively manage collateral and reduce counterparty risk throughout the repo lifecycle. Using SunGard’s Stream Credit Monitor, New York-based Daiwa Securities America is able to eliminate the use of multiple margin and credit monitoring systems and consolidate these processes onto one platform to provide a holistic view of risk and exposure.
In today’s financial landscape, it is imperative for financial institutions to be able to closely monitor and gauge risk and exposure at the firm level in order to react quickly and appropriately. Stream Credit Monitor provides real-time, cross-asset margin and credit functionality to help firms monitor and control risk in a holistic manner.
Daiwa is using Stream Credit Monitor, integrated with SunGard’s Phase3 solution, to manage collateral and monitor counterparty margin and exposure on its repurchase agreements or “repo” financing transactions for futures, equities and fixed income instruments on a single platform.
Nicholas Rubino, executive vice president and chief operations officer at Daiwa Securities America, said, “SunGard’s Stream Credit Monitor provides a single application for multiple asset classes that shows our total cross-product, cross-counterparty exposure in one place, even taking into consideration stock loan activity, interest rate swaps and total return swaps. Stream Credit Monitor has had a direct, positive effect on Daiwa’s bottom line and viability in an unpredictable market, helping to make us immediately aware of exposures.”
Stream Credit Monitor calculates margin requirements for each counterparty, monitors margin exposure and supports specific haircut requirements, accrued interest, and market value calculations to determine the margin or exposure amount for each counterparty. It is an intra-day and end-of-day margining solution that iterates from price and activity triggers, prompting the recalculation of strategy-based accounts taking advantage of sophisticated pairing rules.
Stream Credit Monitor helps financial institutions to enhance service to customers and reduce risk by producing timely and accurate measurements of requirement and excess. In addition to automated margin call issuance and resolution features, Stream Credit Monitor provides a deep set of workflow events used by managers to quantify their exposure and facilitate resolution workflow. Using continuous feeds from global markets, Stream Credit Monitor generates intra-day margin calculations, supports margin rules from the major exchanges worldwide, and integrates with most transaction processing applications.
Stream Credit Monitor is built on top of Stream, SunGard’s data aggregation framework, and is integrated with SunGard’s GMI and Phase3 solutions. With the upcoming integration of SunGard’s GL Ubix solution and Stream, Stream Credit Monitor will also work seamlessly with GL Ubix.
More information about Daiwa
Daiwa Securities America Inc. (DSA) is a corporation organized under the laws of New York, a broker-dealer registered with the U.S. Securities and Exchange Commission, a futures commission merchant (FCM) regulated as such by the CFTC, and a primary dealer in U.S. government securities. Daiwa is a member of the Securities and Exchange Commission, FINRA, NYSE Euronext, all regional exchanges, Chicago Board Options Exchange, Futures Commission Merchant, Depository Trust Clearing Corp., Fixed Income Clearing Corp., Options Clearing Corp., Mortgage Backed Securities Clearing Corp., and SIPC. Daiwa’s Global Clearing Network actively clears in 25 local markets as well as Euroclear.
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