Baton Systems, which provides post-trade solutions for capital markets, has teamed-up with Citi to help build its treasury function for cleared derivatives.
Baton’s platform will aggregate data from Citi’s banks and custodians and track collateral collected from its clients all the way through to CCPs. In addition, Baton will enable real-time visibility of excess/deficit calculations, collateral posted, and eligibility, haircuts and risk thresholds for specific clearing houses. Citi will be able to implement automated rules to optimise the movements of cash and securities to/from clearinghouses, eliminate manual entries into multiple systems, and reduce collateral risk and cut operational costs.
“Managing and redeploying cash and collateral has always been critical for safe and economic performance of clearing members,” says Arjun Jayaram, CEO and founder of Baton. “As evidenced by the recent bout of volatility, it is even more critical for financial institutions to be equipped with tools that will help them effectively manage their intraday liquidity needs and reduce risk. Baton is increasingly recognised as the leading industry provider for these capabilities and we look forward to playing a role in improving Citi’s treasury workflows.”
“Our integration with Baton will help drive greater efficiency across our entire collateral workflow process and significantly reduce the risks we typically see with manual intervention,” says Mariam Rafi, head of financial resources management for Citi Futures, Clearing and FXPB. “The automation and real-time view of collateral the system provides will enable us to more effectively deploy capital in the right place at the right time.”