As collateral transaction data grows in volume, its importance to data management also grows. Also, C-level data executives are wielding more influence to direct data management methods and trends
Collateral considerations are the focus for two features in the June issue of Inside Reference Data. Having established that collateral transactions and the data they produce are increasing, and that more firms are trying to manage or better manage collateral data, we're hearing more about the importance of collateral transactions and data, particularly in terms of risk management and gaining a competitive edge.
In "Putting a Value on Collateral," Nicholas Hamilton reports how Anthony Belcher of Interactive Data has called for industry participants to start setting policies and procedures for sourcing collateral valuations and deciding what valuations data is acceptable. Firms should not wait for confirmation of which collateral instruments will possibly be cleared centrally under the European Market Infrastructure Regulation (Emir), Belcher adds.
To begin with, calculation of the amount of collateral, or margin, that must be posted has to be reliable. Central counterparties must exercise care and deliberation about prices and valuations, which will inform those calculations, says Marcus Zickwolff of the European Association of Central Counterparty Clearing Houses.
Central counterparties can be more efficient at cross-margining, Deutsche Bank's Bradley Foster says in the other feature on collateral data processing improvements. With new rules and mandates, especially initial margin requirements, affecting liquidity, the Depository Trust & Clearing Corporation and Euroclear are working on a Margin Transit Utility aimed at facilitating the straight-through processing of collateral transactions and the eradication of process inefficiencies (and ensuing illiquidity) that could be exacerbated by the need to collect collateral more often. The growth of collateral data is also raising questions about transparency, outsourcing and regional differences for management.
Last month, IRD considered the rise of the chief data officer. This month, we look at other trends in management and organizational development that can affect how reference data is processed and used.
In "Governing Data Governance," we hear from some of those C-level data or information executives about how firms' data governance concerns are best served by giving them the authority to develop governance methods, policies and procedures.
Finally, in this month's "Interview With," Nomura's Brian Buzzelli sets out some caveats about two popular data management methods, enterprise data management and drawing on cloud resources. His comments just go to show that chief data officers, or those with equivalent titles, can sometimes take a leadership role by bucking the conventional wisdom.
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails
- Chicago Code: A Profile of DRW's Seth Thomson
- AFTAs 2017: Best IT Team—Charles Schwab Investment Management
- The Kids Aren’t Alright: A Look at How K-12 Schools Are Failing to Teach Programming
- AFTAs 2017: Best Analytics Initiative—Credit Suisse
- Buy Side Bands Together on Blockchain Vision in Landmark Paper