In other FinTech news, Switzerland blesses DTCC’s GTR, Merrill Edge helps users scope out ETFs, and Kamakura Risk Manager includes a new software tool.
New RJO Group Will Use Proprietary Software
Officials at futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) have announced that an affiliate R.J. O’Brien Financial has launched an over-the-counter (OTC) Agricultural Structured Products Group that will target commercial agricultural companies across the globe – a first for RJO.
The bilateral OTC initiative will employ “a first-of-its-kind proprietary software platform, ” a web-based trading and back-office application, dubbed Cara. The new IT system was developed by the team’s financial engineers “to analyze client needs and then generate and quote a wide range of customized hedging strategies,” according to RJO.
In addition, Melisa Culbertson, executive director and senior vice president, OTC structured products, will lead the new group, officials say.
Culbertson has worked as an independent floor and electronic grains trader and has more than 25 years of experience as a member of the Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME). Before RJO, she was head trader, OTC products for the Chicago division of a major brokerage firm for three years.
“The team developed the OTC offering and infrastructure before introducing the product to select clients earlier this year in a soft launch,” according to RJO. The initiative and trade management are internal efforts and the group “has been able to adapt quickly based on meaningful input from participating clients.”
The Cara system will be part of the RJO online systems portal, and will be used to help develop trading strategies, place orders, track quotes in real time, and closely monitor positions throughout their lifecycle, officials add.
“Customized structured products can be an excellent complement to using futures for risk management, giving commercial hedgers more tools and choices to hone their strategies,” Culbertson says in a prepared statement.
RJO is based in Chicago.
DTCC’s Global Trade Repository Hits Swiss Market
Post-trade services and infrastructure provider, the DTCC has received regulatory approval from the Swiss Financial Market Supervisory Authority to offer trade reporting services in Switzerland via DTCC’s Global Trade Repository service (GTR) in Europe, officials say.
With the designation as a foreign trade repository in Switzerland, GTR will expand its services to market participants “in support of reporting obligations that fall under the Swiss Financial Markets Infrastructure Act (FMIA), also known as FinfraG,” officials say. “FinfraG aligns Swiss derivatives trading regulation with international standards and requires that firms with a registered office in Switzerland report their derivatives trades to an authorized or recognized trade repository.”
DTCC officials say that the company’s GTR in Europe “is the largest European Markets Infrastructure Regulation (EMIR)-registered trade repository in terms of reports collected from its clients, according to figures from the European Securities Markets Authority (ESMA). The service has more than 3,500 clients sending over 500 million messages per month, with 46 European regulators regularly accessing its data.”
GTR provides derivatives trade reporting services through its registered trade repositories across several jurisdictions, including the United States, Canada, Europe, Hong Kong, Singapore, Japan and Australia, and across all over-the-counter (OTC) asset classes, including credit, interest rates, equities, foreign exchange and commodities, officials say.
Merrill Edge Offers Research Function for ETFs, Mutual Funds
Merrill Edge, a streamlined investment service from Merrill Lynch, has rolled out “Fund Story,” a way to help self-directed investors more easily evaluate mutual funds and ETFs, including holdings, costs and ratings, officials say.
“This innovative feature is designed to provide investors a greater understanding of their assets and ultimately help them make better investing decisions,” officials say. “Merrill Edge provides access to the investment insights of Merrill Lynch and … clients can view their Merrill Edge investment and Bank of America bank accounts on one page online. They also have access to easy-to-use tools, actionable insights, step-by-step guidance and competitive pricing for online trades.”
The new service is in addition to Stock Story, Merrill Edge’s award-winning stock research service, launched in November 2017, and Portfolio Story, a portfolio analysis and performance review tool launched last year, officials say.
Kamakura Risk Manager Update Includes New Tool
Kamakura officials report that they have added a software tool to the latest release of Kamakura Risk Manager (KRM), version 10.0.5, that will simplify the management of over-the-counter (OTC) derivative risk, and the integration of OTC data from trading, helping portfolio managers with decisions about this important asset class.
The tool “evaluates all non-cleared OTC derivative risk, providing full compliance with ISDA SIMM 2.1 (Standard Initial Margin Model),” company officials say.
The new tool “complements KRM’s FRTB (Fundamental Review of the Trading Book) module, which provides both a standardized approach and an internal models approach for regulatory reporting. A previous update provides calculations for expected lifetime loss (CECL in the US and IFRS9 internationally),” officials say.
“The new tools will improve compliance management as regulators continue to move to a standardized framework for risk evaluation, rather than relying on bespoke internal models. Similar to the BIS market risk capital regulations, the FRTB standardized approach allows an institution to consolidate and coordinate the implementation of new risk systems,” officials add.
Kamakura Corp. provides risk management information, risk management software and risk management consulting, officials say. The vendor ’s headquarters are in Honolulu, Hawaii.
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