Sterling Trading Tech Enhances Its Risk and Margin Services
In a significant move to bolster its technology offerings, Sterling Trading Tech has announced that it will expand its asset class coverage to incorporate fixed income instruments. This strategic development aims to provide customers with a more comprehensive toolset to navigate the complexities of modern trading.
Access to a Broader Range of Instruments
By adding fixed income options to its established framework, Sterling enhances its existing support for U.S. and international equities, futures, options, FX, and crypto assets. This addition is particularly timely, as firms are increasingly looking for robust risk management solutions that can adapt to varying market conditions.
Challenges in Internal Capabilities
Building and maintaining the required technological capability to manage diverse asset classes can be resource-intensive. Many firms face hurdles, including regulatory changes and market developments. However, Sterling Trading Tech offers a solution through its Sterling Risk & Margin (SRM), designed to be both efficient and cost-effective.
Key Features of the Expanded SRM
Clients utilizing the SRM platform can access essential features related to fixed income, including:
- Market data for a variety of bonds, such as sovereign, corporate, convertible, and municipal.
- Comprehensive U.S. and international market coverage.
- Access to closing prices and intraday indicative pricing.
- Risk shocks for bonds to effectively manage interest rate risk.
- Integrated calculations for account- and firm-level interest rate risk.
Compliance and Risk Management Integration
In terms of regulatory compliance, the system adheres to standard FINRA margin requirements for fixed income securities while allowing for tailored overrides at the company and account levels. Furthermore, it allows users to incorporate interest rate risk into their Value-at-Risk (VaR) assessments, a critical factor for those utilizing fixed income in their portfolios.
Advanced Analytics Capabilities
SRM also provides advanced analytics through a Risk-as-a-Service (RaaS) model, empowering firms to monitor adherence to Regulation T, portfolio margin requirements, and custom internal policies in real-time. This immediacy is invaluable for firms that require precise risk analysis post-execution across a diversified set of asset classes.
Testing Against Market Scenarios
The newly developed capabilities enable clients to thoroughly assess how fixed-income securities influence overall portfolio values. This is particularly useful for stress-testing against various interest rate shocks, therefore determining overall portfolio risk exposure in changing markets.
Future Innovations on the Horizon
In keeping with its commitment to innovate and ensure excellence in its product suite, Sterling will also be expanding its capabilities to include mutual funds shortly. As fixed income exposure rises, the need for a comprehensive suite of tools becomes paramount for client risk management.
Customer-Centric Approach
Brian Saldeen, CFA, Senior Product Manager for Risk and Margin at Sterling Trading Tech, commented, "Firms must have the tools to effectively manage their risk across all asset classes, especially as yields rise and fixed income exposure increases. We appreciate the necessity for businesses to measure and mitigate risk and have tailored our approach to integrate these factors seamlessly into our offerings."
Frequently Asked Questions
What is the new feature announced by Sterling Trading Tech?
Sterling Trading Tech has expanded its services to include support for fixed income instruments in risk and margin services.
How does the new feature enhance client operations?
The expanded SRM platform allows clients to integrate fixed income into their operations, improving risk assessment and mitigation.
What are the advantages of using Sterling's Risk & Margin platform?
Clients can access comprehensive market data, assess interest rate risks, and ensure compliance with regulatory requirements seamlessly.
Will there be future updates to Sterling's offerings?
Yes, Sterling plans to expand its platform further to include mutual funds and additional innovations.
How does Sterling Trading Tech support its clients?
Sterling is committed to delivering fast, reliable technology along with exceptional customer service tailored to individual client needs.
