Securities financing structures help Financial Resource Management (FRM) desks at banks control their balance sheet, liquidity, and asset mix within strictly defined criteria. Doing so, they help ensure compliance with regulations that demand banks maintain sufficient capital ratios to weather shock events. However, infrastructure, processes, and lifecycle management within the securities financing markets are disjointed and can present operational headaches, largely due to the bespoke nature of these trades and incompatibility with legacy systems. The time-consuming nature of agreeing, executing, and managing trades leaves little time to focus on managing the balance sheet as efficiently as possible.
The Wematch FRM Optimizer simplifies, systemizes, and optimizes the recall and substitution process of the principal composition basket and bilateral collateral basket on securities-based lending financing trades. These tools provide a central marketplace for lenders and borrowers, enhanced trade capture to ensure term sheets are well-defined and adhered to lifecycle management tools, and a user-rule-driven optimization tool to manage recalls and substitutions and ensure optimal inventory allocation across bilateral principal and collateral baskets.
A Comprehensive Toolset for FRM Desks
The Wematch FRM Optimizer automates workflow across all elements of the recall and substitution process. Core functions include:
Getting connected to Wematch is simple, as it is delivered as a web-based Software-as-a-Service technology that connects clients’ trading processes through live APIs. To get started, or to request a demo, get in touch.
Wematch optimizes loan principal baskets by comparing recall and inventory lists with names in ongoing principal baskets and identifying inefficiencies.
The FRM Optimizer can consider bilateral collateral baskets placed with counterparties, ensuring all inventory is considered when optimizing a portfolio of trades.
By combining recall and inventory lists, Wematch allows users to instruct recalls and send an efficient substitution simultaneously within defined optimization rules and constraints and at the click of a button.
Two-way communication and negotiation can be managed in a single workflow environment with full audit trail and integration options with booking systems, ensuring standardization, accuracy, and efficiency across the trade lifecycle.
Easily top up or reduce the ongoing notional of a trade by setting a target before running the optimizer. The result is an optimal addition or recall of efficient assets in the principal basket ensuring trade balance is maintained after market-to-market moves.