OCC and eSecLending innovate for times of stress
28 January 2014 Chicago
Image: Shutterstock
The operating arm of securities lending agent eSecLending and Options Clearing Corporation (OCC) have teamed up to create an automated default management platform.
Using 麻豆传媒 Finance Trust Company鈥檚 (SFTC) hosted software Auction Platform Services (APS), which is a secure web-based portal that offers the ability for listing auction assets, centralised bid submissions, and management/audit reporting, OCC will achieve administrative efficiency and cost savings.
APS was used to conduct OCC鈥檚 most recent default management simulation exercise, with successful participation from clearing members in November 2013.
SFTC developed APS to help address regulatory concerns and provide central counterparties (CCPs) with the level of automation and reporting functionality that demonstrates to regulators, auditors, boards of directors, and compliance groups that their default management process is conducted in a controlled environment.
鈥淥CC鈥檚 ability to conduct auctions of cleared contracts and collateral is a key component of its default management programme,鈥� said John Fennell, who is OCC鈥檚 senior vice president for risk management and treasury operations.
鈥淎PS was designed to bring automation and scalability to OCC鈥檚 existing auction process. We are pleased to team with SFTC because of their known expertise in financial auctions and their ability to quickly bring the platform to market.鈥�
Chris Poikonen, executive vice president at SFTC, said: 鈥淎s trade volumes rise, CCPs around the globe are coming under increasing regulatory scrutiny, particularly as it relates to their default management procedures, and the associated technology used to support them. They need to demonstrate that their asset liquidation process is conducted in a disciplined, efficient, and risk controlled manner, while protecting non-defaulting members from undue loss.鈥�
鈥淲e are confident that our product offering will help OCC manage the orderly unwinding of a defaulting member's positions during times of market stress."
OCC recently reshuffled its leadership team, with Craig Donohue becoming executive chairman, Michael Cahill becoming president and CEO, and Michael McClain moving up to the role of chief operating officer, giving him oversight of business operations and technology.
Its securities lending CCP activities saw an 8 percent increase in new loans from December 2012, with 93,274 transactions last month.
Stock loan activity in 2013 was up 26 percent from 2012 with 1,233,708 new loan transactions in 2013, marking the highest annual volume for stock loan activity to date. The average daily loan value at OCC in December was $72,489,182,819.
Using 麻豆传媒 Finance Trust Company鈥檚 (SFTC) hosted software Auction Platform Services (APS), which is a secure web-based portal that offers the ability for listing auction assets, centralised bid submissions, and management/audit reporting, OCC will achieve administrative efficiency and cost savings.
APS was used to conduct OCC鈥檚 most recent default management simulation exercise, with successful participation from clearing members in November 2013.
SFTC developed APS to help address regulatory concerns and provide central counterparties (CCPs) with the level of automation and reporting functionality that demonstrates to regulators, auditors, boards of directors, and compliance groups that their default management process is conducted in a controlled environment.
鈥淥CC鈥檚 ability to conduct auctions of cleared contracts and collateral is a key component of its default management programme,鈥� said John Fennell, who is OCC鈥檚 senior vice president for risk management and treasury operations.
鈥淎PS was designed to bring automation and scalability to OCC鈥檚 existing auction process. We are pleased to team with SFTC because of their known expertise in financial auctions and their ability to quickly bring the platform to market.鈥�
Chris Poikonen, executive vice president at SFTC, said: 鈥淎s trade volumes rise, CCPs around the globe are coming under increasing regulatory scrutiny, particularly as it relates to their default management procedures, and the associated technology used to support them. They need to demonstrate that their asset liquidation process is conducted in a disciplined, efficient, and risk controlled manner, while protecting non-defaulting members from undue loss.鈥�
鈥淲e are confident that our product offering will help OCC manage the orderly unwinding of a defaulting member's positions during times of market stress."
OCC recently reshuffled its leadership team, with Craig Donohue becoming executive chairman, Michael Cahill becoming president and CEO, and Michael McClain moving up to the role of chief operating officer, giving him oversight of business operations and technology.
Its securities lending CCP activities saw an 8 percent increase in new loans from December 2012, with 93,274 transactions last month.
Stock loan activity in 2013 was up 26 percent from 2012 with 1,233,708 new loan transactions in 2013, marking the highest annual volume for stock loan activity to date. The average daily loan value at OCC in December was $72,489,182,819.
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