Chicago and Boston -
OCC and Securities Finance Trust Company announced today they have developed Auction Platform Services to aid OCC with its default management process.
APS is a secure web-based portal that provides OCC with the ability for listing auction assets, centralized bid submissions, and management/audit reporting. OCC will use SFTC's hosted software APS to achieve administrative efficiency and cost savings. APS was used to conduct OCC's most recent default management simulation exercise with successful participation from clearing members in November.
SFTC developed APS to help address regulatory concerns and provide central counterparties with the level of automation and reporting functionality that demonstrates to regulators, auditors, boards of directors, and compliance groups that their default management process is conducted in a controlled environment.
"OCC's ability to conduct auctions of cleared contracts and collateral is a key component of its default management program," said John Fennell, OCC Senior Vice President, Risk Management & Treasury Operations. "APS was designed to bring automation and scalability to OCC's existing auction process. We are pleased to team with SFTC because of their known expertise in financial auctions and their ability to quickly bring the platform to market."
"We are delighted to work with OCC and offer them an automated asset liquidation platform to aid in providing best in class default management processes," said Chris Poikonen, Executive Vice President at SFTC. "As trade volumes rise, CCPs around the globe are coming under increasing regulatory scrutiny, particularly as it relates to their default management procedures, and the associated technology used to support them. They need to demonstrate that their asset liquidation process is conducted in a disciplined, efficient, and risk controlled manner, while protecting non-defaulting members from undue loss. We are confident that our product offering will help OCC manage the orderly unwinding of a defaulting member's positions during times of market stress."
About Securities Finance Trust Company - Securities Finance Trust Company is the operating arm of the independent global securities lending agent, eSecLending. The company has capitalized on its proprietary auction technology by extending it to service a broader set of asset holders, helping them to achieve administrative efficiency, cost savings and enhanced control when conducting asset liquidations, complex liquid or illiquid security valuations and market stress tests. The company's innovative approach has introduced automation and best in class processes to financial institutions seeking transparency, discipline and automation in their asset price discovery. For more information, visit www.eseclending.com.