OpenGamma Hires LCH Clearnet's Head of Risk Tech to Drive Clearing Push

OpenGamma will this week announce the hire of Mohamed Ait Si Brahim as vice president of engineering to lead the ongoing development of the OpenGamma Platform for Margining, which is aimed at clearing firms such as futures commission merchants that are required to carry out real-time initial and variation margin calculations (i.e. the collateral that the holder of an instrument must deposit to cover some or all of the credit risk of their counterparty) and stress tests on client accounts and new orders.

Ait Si Brahim joins from European clearinghouse LCH Clearnet, where he served for three years as head of risk technology, prior to which he held engineering and operations roles at front- and middle-office software vendor Odyssey Financial Technologies, Thomson Reuters, and Deutsche Börse's Clearstream clearing and settlement division.

In addition, OpenGamma has made a number of more junior hires in London from CCPs, who will focus on honing the vendor's engineering practices for the margining platform, such as developer Paul McLornan, who also joins from LCH Clearnet and─along with the rest of OpenGamma's research and development team─will report to Ait Si Brahim.

"CCPs are regulated entities, so when you're talking about risk technology it has to work. It can't fail," says chief executive OpenGamma Mas Nakachi. "So we are leveraging the experience of Mohamed [Ait Si Brahim] and our other hires, who have worked directly in clearinghouses, to ensure that our product is more resilient, reliable and industrialized. The features are being tested thoroughly to ensure they work the way the CCPs work."

For example, the platform needs to support multiple data sources─including market data from clearinghouses, real-time curves from trading venues, and historical data─which are all required for initial margining calculations and stress testing.

Nakachi says clearing firms are under increasing pressure to manage their risk on an intraday basis, especially in light of a 2009 G20 mandate─manifesting as new regulation under Dodd-Frank in the US and Emir in Europe─that over-the-counter derivatives should be centrally cleared. "If a CCP miscalculates its risk, that could lead to overfunding, which eats away at returns and ties up billions of dollars of capital. Previously, firms built their own systems or used legacy systems, but the requirement to calculate margins on an intraday basis is driving demand for super-fast calculations like ours," he says.