State Street Adds Collateral Analytics with Cassini
Posted by Colin Lambert. Last updated: November 26, 2021
State Street has added pre- and post-trade optimisation and margin analytics to its Collateral+ service in partnership with Cassini Systems.
As a result, the bank says Collateral+ now offers an integrated, modular approach to optimisation, which addresses collateral efficiency from multiple angles. It integrates collateral and funding impact into the front-office decision strategy ahead of the trades being placed.
Through the addition of Cassini’s technology, State Street says Collateral+ can optimise margin and carry cost impact, providing the best trade route by identifying all possible ways to execute and clear the trade and highlighting the lowest cost. The service can also offer margin optimisation as a post-trade utility with tools such as novation and compression to lower margin and funding requirements.
Another module provides true collateral inventory optimisation based on clients’ collateral funding costs in combination with costs such as clearing fees. This optimisation highlights the optimal placement of collateral and the lowest transaction cost routes, State Street says, adding that through its liquidity offerings, including Sponsored Repo and the newly launched Peer-to-Peer Repo, clients can leverage incremental cash and optimised securities revenues in order to effectively execute and grow their investments.
“As an industry, we have a long-held ambition to deliver collateral impacts and trade opportunities to the decision makers in the front office,” says Sam Edwards, head of Collateral+ in APAC for State Street. “Our work with Cassini to develop Collateral+ to provide the intelligence and pre-trade knowledge to the desk is enabling State Street to deliver on this. We are evolving with our clients and developing end-to-end tools and liquidity products in order to allow our partners to focus on their core strengths.”
Cassini Systems CEO Liam Huxley, adds, “[We are] further enhancing the Collateral+ offering with optimisation 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 is a powerful way to identify optimal counterparties and manage thresholds strategically with each and every trading decision.”