Principia Partners, provider for the management and administration of structured finance operations, today announced the availability of Principia Structured Finance Platform (Principia SFP), Version 6.1. Enhancements further integrate risk surveillance tools and controls across business functions. This will enable investors and risk managers to better monitor compliance and gain a standard way to summarize risk exposures within portfolios and across business units, throughout the asset management lifecycle.
Structured finance portfolio managers, operations staff, risk managers, administrators and investors are demanding greater transparency at every stage of ABS, MBS and CDO transactions. Principia SFP has been enhanced to provide even greater flexibility in the aggregation of deal and portfolio information across business units. On-balance sheet credit investment managers, asset managers and administrators are using the platform to gain greater control in viewing, reporting and analyzing risk sensitivity across multiple variables. These include for example, exposures to specified geographies, asset classes, ratings or specific client-defined parameters.
The need to unify the control, management and risk surveillance of structured finance operations is increasingly being highlighted by the industry. Recommendations by working groups and industry bodies have helped to shape regulatory proposals such as the new Basel II Securitization Framework, as well as the conditions for participation in US and UK government initiatives such as the US Term Asset-Backed Securities Loan Facility (TALF) and Public Private Investment Program (PPIP). It is no longer acceptable to manage structured finance assets without the sufficient controls and operations in place to support sophisticated portfolio management.
Basel II requirements currently under review state that to qualify, organizations must have the infrastructure to be able to “demonstrate at all times” that they have a comprehensive understanding of the risk characteristics of individual securitization exposures, whether on- or off-balance sheet.
“With Version 6.1, clients will benefit from additional operational capacity and flexibility in risk monitoring and reporting – whether that’s from a portfolio management, risk oversight or accounting perspective. The US PPIP is a good example of an investor, in this case the US Treasury, saying that it requires its chosen asset managers to demonstrate they have robust operations, risk controls and an on-going means of providing disclosure,” stated David Kennedy, EVP product, Principia. “In the new structured finance environment this is proving to be a common theme and Principia is dedicated to helping participants meet the associated challenges.”