Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.
CME Group’s Traiana Enhances Credit Risk Hub for FX Prime Brokers
Traiana has made significant enhancements to its Credit Risk Hub in order to allow FX prime brokers to define trade information in more detail to increase credit risk controls and reduce the risks of credit over-allocation.
The leading infrastructure service for trade life-cycle and risk management solutions offers its Credit Risk Hub for a dual purpose: Designation Notice Manager and Credit Link. The former helps FX prime brokers establish, monitor, amend and terminate FX Tri-Party Agreements with buy-side clients if they default on a trade. The latter is a calculation engine which provides FX prime brokers with end-to-end control of how much credit is extended to buy-side clients.
The enhancements to the Credit Risk Hub beginning this May will include the ability to define which eligible FX instruments, currency pairs and tenors buy-side managers can trade as part of Tri-Party Agreements, which in turn impacts the level of credit extended to them. CreditLink can monitor the additional trade detail in order to provide greater control to prevent overallocation of risk to clients.
Andres Choussy, Chief Executive Officer of Traiana, commented: “The enhancements to our Credit Risk Hub build on our world leading franchise and allow us to act as a central hub for the calculation, distribution and enforcement of credit lines across prime brokers, executing brokers and their end clients.
Mariam Rafi, Managing Director, Americas Head of OTC Clearing, Citigroup, said: “Citi is focused on giving clients enhanced trading flexibility, while prudently managing our credit exposure. Credit Risk Hub’s new enhancements are a key complement to Citi FX PB’s suite of risk management controls and facilitate increased market access for our clients.”
Leah Mallas, Global Head of FXPB and FX Clearing, J.P. Morgan, added: “Control over credit risk is a key concern for us and our clients. Working with Traiana’s enhanced tools, we are able to provide added controls coupled with increased credit, tenor and product scope. This enables more efficient execution of clients’ trading strategies while also strengthening our risk management as an intermediary.”
Traiana is part of CME Group ever since the acquisition of NEX Group with each NEX share being entitled to 500 pence in cash and 0.0444 shares of CME Group Class A common stock. Run-rate cost synergies are expected to touch $200 million annually by the end of 2021.
The £3.9 billion ($4.96 billion) deal allowed CME Group to operate its individual Markets and Optimisation businesses as sub-brands including BrokerTec, EBS, Traiana and TriOptima.