Responding to customer demands for a more holistic view of collateral, SunGard is launching the Apex Enterprise Collateral Management Solution, an enterprise-wide offering that builds upon a platform from Finace, which SunGard acquired last year.
The software and technology service company’s revamped Apex offering attempts to help customers maximize the use of their collateral while bringing a new efficiency through the centralization of all assets, say SunGard officials. The software provides a singular real-time inventory of collateral asset pools that can include over-the-counter (OTC) derivatives, reinsurance collateral, repos and securities lending.
While many financial institutions must analyze collateral management data on a case-by-case basis within their respective silos, Apex users will be able to manage collateral much more broadly via views across assets, business lines and geographies, officials say.
The software includes support for the integrated business process management (BPM) workflow offered via SunGard’s Infinity Process Platform (IPP). The scalable IPP software suite is based on Java-J2EE/XML and can be integrated into incumbent IT systems. The platform also enables firms to trade collateral and oversee operational requirements.
In addition, the new Apex platform will allow users to calculate their optimal assignment of assets while meeting regulatory collateral requirements via the algorithms of the Apex Optimizer, officials say.
SunGard is targeting banks, broker/dealers and large asset managers and hedge funds, particularly as they gear up for the migration to the mandated execution and central clearing of OTC derivatives. Many more buy-side firms may use the system indirectly especially if their sell-side counterparties white-label the new platform. Exchanges and companies that will be providing swap execution facilities (SEFs) for OTC instruments have also shown interest in the system, officials say.
The new Apex platform follows SunGard’s purchase of Finace from Swisscom IT Services, part of the Swiss telecommunications group Swisscom, in June 2011. Finace’s offerings include securities lending, repo, synthetic finance and collateral management software. The enterprise-wide offering does not replace SunGard’s many point solutions, officials add.
Yet since the Great Recession, there has been a growing need for a broader approach to collateral management, says Jane Milner, head of strategy for securities finance and enterprise collateral management in SunGard’s capital markets business.
“It’s no longer acceptable to see collateral in a siloed way,” says Milner. In fact, she says many firms are creating enterprise collateral departments that are not only taking a wider view of collateral but aiming to better manage all of a firm’s internal collateral.
The push for an enterprise-wide view has also been spurred on by a key element of the OTC reforms—a call to increase capital ratios as required by Dodd-Frank and other regulatory actions of the US government.
“We’ve certainly seen an increase in demand for collateral requirements,” Milner says. “We’ve seen a tying together of the disciplines of collateral management from an operational perspective into the funding and financing environment as well.”
While the software is likely to be installed onsite for many firms, a hosted version is not out of the question.
“SunGard has a very strong footprint in hosting,” Milner says. “We’re looking to leverage that infrastructure for this product as well.”
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