New regulations have been the talk of the industry since the 2008 recession, with Dodd Frank already intact European regulators are keen to implement new rules affecting over the counter products. Firms offering OTC products are lumbered with thousands of pages of new guidelines affecting their daily practices OpenLink Financial LLC (OpenLink),a risk management solutions firm has launched a new business intelligence software in line with guidelines being set under European Market Infrastructure Regulation (EMIR). The solution is an extension of OpenLink’s CubeIntelligence portfolio, the EMIR Cube is being unveiled at E-world this week.
The new online analytical processing (OLAP) based cube offering provides financial institutions and organizations in other verticals, particularly energy firms, participating in bilateral over-the-counter (OTC) derivatives trading a speedy and cost-effective way to comply with the new clearing and reporting requirements.
“Helping our clients across all sectors comply with industry regulations has always been a priority for us,” said Dr. Mark Greene, CEO of OpenLink. “Firms are increasingly using derivatives to hedge and diversify their trading strategies to increase alpha and stay competitive. Our CubeIntelligence team has developed the OpenLink EMIR Cube to ensure clients continue to have access to the OTC market while remaining compliant with the new regulations set to come into force this year.”
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The OpenLink EMIR Cube offers firms the ability to:
- Generate the regulatory reports that firms must provide daily to trade repositories, including the 30-day moving average
- Calculate and record the sum of the absolute values of the notional outstanding portions of current sales
- View the EMIR values for the entire firm and also drill down, by internal firm structure (book), product, trade type and other categories into trade level detail if required
- Specify which trades, books or products are in scope of the regulations so users can filter on these criteria to calculate the EMIR values for the in-scope trades only
- Run “what ifs?” scenarios to see how the EMIR values would change in certain circumstances
“Using the sophisticated OLAP approach, the new cube provides industry-leading support for our clients for the EMIR rules,” commented David Priestley, founder of CubeLogic and Managing Director at OpenLink. “The new cube allows firms trading OTC derivatives in Europe to manage risk while remaining compliant and producing all the mandated reports and complex calculations in a timely and efficient manner.”
Spot FX has been exempt from Dodd Frank rules however client assets and segregation of client money is a hot topic in MIFID II.