Nasdaq overhauls clearing risk

Risk, a risk management platform for its Nordic clearing house, Nasdaq OMX Clearing, Automated Trader reports.

Genium Risk aims to provide the clearing house with a real-time risk management solution, including new tools for improved risk monitoring and handling of incidents for derivatives clearing.

The system is expected to reduce the amount of collateral firms are required to post in order to secure their trades, by allowing clients to cross-margin against a range of products, Financial News says.

Hans-Ole Jochumsen, president of Nasdaq OMX, says: "The new risk model for fixed income is a very important step forward, as it allows us to be much more accurate in how we calculate margin, and it also allows us to be more efficient in how we manage collateral between long-term and short-dated products.”

FT.com states that, according to a recent report by Tabb Group, a consultancy, there will be a need for significant upgrades in clearing technology to cope with an estimated 20-fold increase in transaction volumes and demands for ever-faster trading speeds.

There will also be increased complexities in margin requirement calculations and finding offsets within portfolios to reduce margin requirements, straining systems further.