Real-time clearing A short history of
a pioneering innovation
Why?
Massive developments in trading drove the need for a radically
new approach to clearing and risk management
Two significant historical trends
(1) The OTC derivatives markets got increasingly complex and lacked transparency
The collapse of Lehman Brothers in October 2008
(2) High frequency trading gained ground during the 2000s and brought new types of risk
The flash crash on May 6, 2010
In 2008 – after Lehman – Cinnober took the strategic decision to build the world’s first real-time clearing system. “Mission impossible” was what many thought.
Cinnober’s vision
Limitations of legacy clearing systems Batch processing of risk
Couldn’t cope with accel-erating trading speed
Instrument-specific Inefficient and costly infrastructures with silos
Risk-model specific Insufficient for a rapidly changing world
Static Complex to add new products, functions & clients
Bring clearing up to speed with trading Real-time processing
Calculate risk for each new order and trade – instantly
Instrument & asset class agnostic Allow cross-asset clearing
Risk-centric Multiple risk models for different purposes
Flexible & extensible Support aggressive business development
A market in trouble
Strategy: leverage a proven layered architecture To inherit features from robust technical platform for high-volume marketplaces
Performance
Reliability
Scalability
Extensibility
Just one year later, in 2009, TRADExpress™ RealTime Clearing was launched
A pioneering real-time solution equipped to handle radically growing demands on clearing institutions and their increasingly complex risk management
The full force
Rich quality
• Real-time processing • Leading capacity • Flexibility & extensibility • Reliability
Rich functionality
• Cross-asset clearing • OTC & exchange-
traded contracts • Risk-centric
DUBAI GOLD & COMMODITIES EXCHANGE
BM&FBOVESPA
MARKITSERV
LME CLEAR
JOHANNESBURG STOCK EXCHANGE
5 sites operating or under implementation
BM&FBOVESPA
Migrating four separate clearing houses into a single entity, using a single platform Strengthening robustness of risk management process Allocating capital more efficiently for clients Handling over 10 million end-client accounts and a steady load of thousands of transactions per second Shortening time-to-market for new products and services Read more
Dubai Gold & Commodities Exchange
Integrating trading, clearing and surveillance Real-time risk management, also pre-trade for commodities and FX derivatives Efficient collateral utilization More accurate handling of credit risk Rapid product development Supporting aggressive growth plans Read more
The Johannesburg Stock Exchange
Replacing multiple separate clearing systems with a single integrated solution Processing equities, commodities, derivatives, fixed income and FX in a single clearing system Supporting strategy for growth Managing risk exposure and quantitative analysis flexibly Read more
LME Clear
The London Metal Exchange is launching a brand new clearing house, migrating from LCH.Clearnet Taking more control of its infrastructure & improving end-to-end processing across the LME value chain Using multiple risk models Faster product development Better client service Read more
MarkitSERV Credit Centre
Offering clearing certainty in a fragmented trading and clearing landscape Centralized pre-trade credit checks Connecting trading counterparties, execution venues, FCMs and clearing houses Giving buy-side users control over their credit lines and allowing SEFs to check credit in milliseconds before orders are posted Read more
An ongoing success story Cinnober is pioneering the post-trade
industry with cross-asset real-time clearing technology, and revolutionizing risk
management.
The customer track record speaks volumes.
To learn more
Get in touch: cinnober.com/contact cinnober.com
Follow us:
@cinnober LinkedIn