OpenGamma Debuts Margining Platform

The platform sits on top of its real-time market risk solution, OpenGamma Platform. It runs margin calculations and stress tests on client accounts for futures commission merchants (FCMs) and central counterparties (CCPs), as well as other sell-side trading institutions.

Mas Nakachi, CEO of OpenGamma, tells Sell-Side Technology that as new regulations push OTC products from being bilateral transactions to being centrally cleared, market participants need to perform margin calculations faster in order to execute and clear more transactions.

With the new requirement that initial margin must be posted on all transactions, there's a need for more, faster calculations to measure risk for both pre- and post-trade risk-measure-based credit limit checks.

"What all this means is that whether for pre-trade on swap execution facilities (SEFs) or post-trade off-SEF execution, there are going to be credit limit checks that are going to be required to perform at increasingly fast intervals as more and more trading kicks up using these new frameworks," he says. "Those will require fast calculations of these margin values. A firm that can do that faster and more precisely than their competitors will be able to attract more business and ultimately execute and clear more transactions."

Nakachi adds that while there are plenty of risk systems that perform margin calculations, OpenGamma's solution has been specifically designed for the OTC space and isn't repurposed from another asset class.

"There are very few that do this specifically for OTC derivatives, which is where we're focused," he says. "Our background is in real-time market risk."