State Street Enhances Collateral+ with Addition of New Optimization and Analytics Capabilities

The world institutional financial services provider State Street announced yesterday the addition of market leading pre-and post-trade optimization and margin analytics capabilities to its Collateral+ service in partnership with Cassini Systems, the leading provider of pre- and post-trade margin and collateral analytics for derivatives market participants.

With the collaboration, Collateral+ now offers an integrated, modular approach to optimization, which addresses collateral efficiency from multiple angles.

According to the announcement, Collateral+ integrates collateral and funding impact into the front-office decision strategy ahead of the trades being placed. It can optimize margin and carry cost impact, identifying the most efficient trade route by identifying all possible ways to execute and clear the trade and highlighting the lowest cost. Also, it can offer margin optimization as a post-trade utility with tools such as novation and compression to lower margin and funding requirements.

Another module provides true collateral inventory optimization based on clients’ collateral funding costs in combination with costs such as clearing fees. This optimization seeks to highlight the optimal placement of collateral and the lowest transaction cost routes. Through the bank’s liquidity offerings, including Sponsored Repo and the newly launched Peer-to-Peer Repo, clients can leverage incremental cash and optimized securities revenues in order to effectively execute and grow their investments.

“We are excited to partner with State Street on further enhancing the Collateral+ offering with optimization capabilities and analytics that can bring its clients substantial cost savings and a true understanding of front-to-back costs across the entire lifecycle of a trade. The ability to apply these analytics to the Initial Margin requirements of UMR (Uncleared Margin Rules) is a powerful way to identify optimal counterparties and manage thresholds strategically with each and every trading decision,” said Cassini Systems CEO Liam Huxley.