In other FinTech news, Torstone buys Percentile, Numerix supports the SIMM update, the DTCC has a new partner, and there’s an AI tool to uncover risks.
First German Bank to Use CDSClear
Deutsche Bank is the first German bank to offer its clients clearing via CDSClear, and asset management firms MEAG and Union Investment are clearing European and U.S. credit default swap (CDS) instruments via global clearinghouse group LCH.
“Offering clients access to LCH CDSClear will provide them with more choice, and we are delighted to have completed this milestone,” says Nic Maalouf, global head for listed derivatives and clearing at Deutsche Bank, in a statement. “We are committed to the derivatives clearing business and continuously review our offering to evolve and grow in line with the demands of our clients,” Maalouf says.
The German market represents a major hub for credit derivatives, and “Deutsche Bank is the latest clearing broker to join our growing network of firms offering their clients the ability to clear credit derivatives at LCH,” says Frank Soussan, global head of CDSClear, in a statement.
In a prepared statement, Jan Reher, senior portfolio manager fixed income at MEAG, says: “Connecting to LCH provides us access to a broad range of cleared US and European CDS products and we are pleased to have onboarded via Deutsche Bank.”
Torstone Technology Acquires Percentile
Torstone Technology, a post-trade securities and derivatives processing technology vendor, has signed a definitive agreement to acquire Percentile, a provider of real-time, cloud-based risk and compliance technology to financial markets, officials say. No financial details were announced.
Percentile offers real-time, cloud-based risk and compliance technology and its flagship product, RiskMine, facilitates alignment between trading desks and risk management to improve transparency and governance via a single source of truth for risk, officials say.
The Percentile risk management solution will become a component of Torstone’s Platform, vendor officials say. Torstone can now offer cross-asset, post-trade support, “including risk and compliance,” officials say.
The Percentile acquisition follows Torstone’s announcement to “significantly expand its London headquarters to accommodate European business growth, following a revenue increase of over 50 percent year on year,” officials say.
“Torstone Technology and Percentile have long been closely aligned in terms of company culture and values, as well as our approaches to solution development, and emphasizing the benefits of agile, future-proof technology,” says Brian Collings, CEO, Torstone Technology, in a statement.
Beyond London, Torstone supports offices in New York, Hong Kong, Singapore, and Tokyo.
Numerix Supports ISDA SIMM Margin Module Update
Numerix, a risk technology specialist provider, is adding to the Numerix Oneview derivatives pricing and risk system, ISDA’s updated standard initial margin (SIMM) model methodology.
The latest version of the initial margin module generates risk sensitivities and aggregates them into buckets as prescribed by ISDA SIMM, Numerix officials say. “It then produces the ISDA SIMM CRIF (Common Risk Interchange Format) files and initial margin calculations to facilitate fast and smooth margin reconciliations with counterparties. The module also supports ISDA SIMM-specific cross-currency swap treatment and provides configurable ISDA SIMM parameters and sensitivities for added flexibility.”
Forthcoming releases of Oneview “will provide more than just basic margining functionality. Users can expect advanced ISDA SIMM analytics for deeper insights into margin drivers, plus real-time initial margin calculations integrated into Oneview’s pre-deal checks so traders can understand the margin impact of new trades before execution,” according to Numerix.
Numerix Oneview provides a “holistic view of the entire derivatives business across the front and middle offices,” Numerix says in a statement. As a SIMM vendor, Numerix will offer an “initial margin solution for institutions who trade non-cleared derivatives,” the vendor says.
The final phases of uncleared margin rules (UMR) are taking effect September 1, 2019 (Phase 4), and then in 2020 (Phase 5). Market participants will have to clarify if and when they must comply with UMR.
DTCC Partners with Droit
The Depository Trust & Clearing Corp. (DTCC), a post-trade market infrastructure for the financial services industry, reports that it is joining with Droit, a real-time transactional-compliance specialist, so that market participants can use Droit’s reporting eligibility capabilities within DTCC’s pre-reporting transformation services for supported G20 regimes, as well as for the forthcoming securities financing transactions regulation (SFTR).
The joint offering will help reduce firms’ “operational burden and mitigate regulatory risk by allowing firms to apply reporting eligibility logic before submitting transactions to the relevant registered trade repository,” DTCC and Droit officials say in a statement.
Market participants can now use DTCC’s Pre-Reporting Transformation Services “for all key components of a regulatory reporting stack,” according to the statement. Firms can use Droit “to determine the full global cross-regulatory reporting implications and obligations associated with a transaction in real-time as well as receive complete auditability and traceability through to fully digitised regulatory text.”
Steele Compliance Unveils AI Tool to Uncover Risks
Steele Compliance Solutions, Inc., a provider of integrated risk management systems, has unveiled its AI Investigator, which Steele characterizes as the industry’s “only real-time data source for identifying financial and corruption risk.”
The AI Investigator “provides compliance professionals a single source for identifying risk events by using machine learning and natural language processing to deliver a consolidated risk profile that verifies data through Steele’s patented AI technology,” per the firm.
“The needs and demands of compliance departments continue to grow and evolve,” says Eric Lochner, Steele’s CEO. “Steele’s patented AI-driven platform provides compliance teams with the most relevant results saving not only time, but money. Compliance teams will have more time to analyze and make strategic decisions on the right data, rather than spend time mining news sources and clearing false positives.”
AI Investigator “creates risk profiles, by consolidating data from over 5+ million websites, nearly 1,000 sanctions/watchlist databases, 135+ million company records, 180 million officer records, and nearly a million offshore records,” Steele says.
The data system is adding more than 30,000 new records daily, per Steele.
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