23% Increase in Initial Margin Posted at Major CCPs Drives Demand for Digital Transformation of Legacy CCP Margining Process
Transcend, a leading provider of inventory, funding and liquidity management and optimization solutions, expands its best-in-class solution suite with the launch of CCP Central. CCP Central is the first platform to connect and automate margin and collateral management activities across a global network of Central Clearing Counterparties (CCPs).
With Initial Margin posted at CCPs reaching record highs in 2020 and cleared OTC derivatives margins alone up by 22.8% year over year1, it is no longer feasible, let alone scalable, for firms to manually process CCP margin requirements. CCP Central addresses the risks and inefficiencies of manually funding growing CCP exposures.
“CCP margin and collateral management is key to a capital markets workflow, but the lack of transparency and disconnected, manual processes that firms have relied on up until this point have created a high degree of risk that is only growing as CCP margin pressures increase,” said Bimal Kadikar, CEO of Transcend. “Our CCP Central solution delivers a control framework that seamlessly addresses one of the industry’s largest pain points while also creating process efficiency and improved financial performance.”
Transcend’s CCP Central solution specifically targets the many challenges associated with manual and siloed CCP margin activity. The platform provides pre-built connections to CCPs, eliminating a reliance on internal development resources to set up multiple complex integrations. By offering advanced optimization capabilities and straight-through collateral processing, Transcend provides an end-to-end solution to connect, standardize, optimize and automate CCP funding.
Transcend’s innovative CCP Central solution seamlessly addresses some of the industry’s greatest margining challenges by providing:
- Out-of-the-box connectivity and harmonized data across CCPs, exchanges, and internal platforms for client and house collateral
- Comprehensive analysis of margin calls and balances, collateral schedules, positions and transactions, and RQVs to satisfy margin requirements
- Sophisticated collateral optimization not only across CCPs, but also across the enterprise to identify the smartest collateral movements
- Straight-through-processing (STP) to automatically execute funding decisions without the need for manual oversight
- Monitoring and alerting frameworks to tightly control risk exposures
“Transcend’s clients have been asking for a single place to monitor, manage and automate funding activities across their global network of CCPs,” explained BJ Marcoullier, Head of Business Development at Transcend. “Transcend is proud to deliver a solution that not only addresses these needs, but also integrates with our clients’ broader enterprise framework for true scalability.”
As cleared derivatives CCPs become a growing proportion of collateralized exposures, Transcend’s CCP Central solution presents an opportunity for firms to implement best-in-class capabilities and integrate cleared derivatives into their enterprise-wide collateral management strategy.