Broadridge, TTC collaborate to enhance post-trade management of futures, options - SmartBrief

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Broadridge, TTC collaborate to enhance post-trade management of futures, options

4 min read

Modern Money

For years, real-time margin calculations were a pipe dream for risk managers. However, a new partnership is working to show risk managers that the dream is now a reality. Broadridge Financial Solutions and The Technancial Company are combining TTC’s JANUS Margin Engine with Broadridge’s post-trade management solution to create a new post-trade offering for options and futures. This new solution will provide clients access to expanded derivatives processing capabilities, including client clearing and the power to consolidate post-trade operations across various assets.

The move reflects trends both firms have seen in the marketplace. “Margins are no longer an end of day calculation. We can answer questions about open orders in microseconds,” Mirko Marcadella, TTC’s Global Head of Business Development, explained on the sidelines of the 41st Annual International Futures Industry Conference in Boca Raton, Fla.

“The collaboration between Broadridge and TTC offers our mutual clients the ability to benefit from a superior, highly efficient exchange traded derivatives capability with seamless process throughout,” explained Paul Clark, Broadridge’s head of Institutional Strategy and Product Management. “The solution is integrated with post-trade processing and operational control for other asset classes offered via Broadridge’s global post-trade management platform. Our strategic alliance with TTC is a natural fit based on our shared focus to provide the highest levels of value and customer service to our clients.”

This collaboration comes in response to increasing demand for firms to update systems and find operational efficiencies amid a deluge of new regulations that affect the full range of clearing, reporting and operations functions. Innovative technologies, the companies say, will continue to play a critical role in all of these functions.

Amid all that regulatory change, Marcadella highlighted the cost-efficient aspect of their platform. “These tools can be used on standard hardware. Cost is affordable for small companies.”

Clark added that the versatility of the tools is also appealing because institutions are having a harder time justifying costs for tools that only solve for one task. “Arrangements like this help us move our clients away from siloed solutions,” Clark explained.

Alex Lamb, TTC’s Head of Business Development Americas noted that new technologies are coming up against long-held beliefs by market participants.

“Modern industry participants need to know where things stand now. Our margin engine allows them to know the current values,” Lamb said. However, many in the industry are unaware that such calculations are now available in microseconds, rather than hours.

“The bigger institutions haven’t been expecting capabilities like this,” Lamb explained. “Many years of skepticism is about to be overcome.”

Lamb is confident that once financial institutions become familiar with the capabilities of TTC’s technology, expectations will change rapidly.

“The nature of the business drives innovation and change. … Risk managers have to know what is happening now. This system will help people decide that they want to implement T+0.” Lamb said.

“Working with Broadridge enables us to provide industry participants with an opportunity to seamlessly implement a leading set of capabilities for exchange traded derivatives margin and operations,” said Marcadella. “The integrated solution offers best-of-breed post-trade processing and leverages a real-time solution developed for use from pre-trade calculations through to calculating initial margin for reconciliations and payments. We believe that our combined offering brings a gold standard solution to the futures and options marketplace.”

Some nine out of 10 mutual funds and private companies in North American rely on Broadridge’s infrastructure for proxy voting services, and the company processes an average of $5 trillion in equity and fixed income trades daily.

TTC’s JANUS Platform supports 70-plus risk checks and margin algorithms for more than 60 clearing houses, with capabilities that can be utilized pre-trade, post-order and post trade covering management functions.

Marcadella said the ultimate goal is to empower market participants. “Our tools allow our clients to better consult their clients about their positions.”