System, method, and computer program product for collateral management operations
A centralized collateral management operation system that includes a collateral management system (CMS) provider linked to a trading group—a plurality of users (e.g., individuals, corporations, financial institutions, and the like). The method allows the CMS provider to dynamically determine anticipatory collateral value and mark to market (MTM) collateral obligations for each of the users' sub-portfolios. The provider is then able to notify each of the users of their MTM and anticipatory collateral obligations for their respective sub-portfolios, and issue “Collateral Credits.” The Collateral Credits allow the CMS provider to efficiently allocate the amount of collateral posted by each member of the trading group to protect against present losses and potential future losses due to the inability of the user to meet its obligations. The system provides equivalent collateral protection as a fully collateralized bilateral system while decreasing individual collateral requirements.
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Richard David H. Brett
Apostolik Shimko Humphreys