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Sterling Trading Tech has announced that it will expand its asset class coverage to include fixed income instruments. The firm has structured its risk and margin platform to accommodate bonds alongside equities, options, futures, and foreign exchange.
Sterling’s expansion includes risk analytics for sovereign, corporate, convertible, and municipal bonds. The firm has integrated interest rate risk models, margin calculations, and real-time pricing data.
“As yields rise and fixed income exposure increases”
Brian Saldeen, Senior Product Manager – Risk & Margin at Sterling, 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 understand their need to measure and mitigate risk in a highly regulated environment. Our approach integrates asset classes, risk exposure, and regulatory compliance into a single, comprehensive offering.”
Sterling Trading Tech has confirmed that its fixed income risk management system aligns with regulatory requirements, including FINRA margin rules. The company has structured its system to provide risk tracking for fixed income securities across multiple jurisdictions.
Sterling has positioned its fixed income expansion as an extension of its broader risk and margin technology platform.
The Sterling Risk & Margin System (SRM) offers advanced analytics as a RaaS (Risk-as-a-Service) solution, covering global equity, equity options, and equity futures markets for risk calculations.
The SRM uses quantitative and big data techniques to manage risk and monitor margin in real-time, calculating risk scenarios, stress tests, portfolio margin, risk-based haircuts, maintenance margin, and Value at Risk (VaR) for each account, with the capability to add and handle firm-specific house rules. The firm has recently added the FX and Crypto asset classes to its risk and margin system, providing a new level of multi-asset risk coverage for clients.
Ascertain how fixed income securities contribute to portfolio values and margin requirements
STT first announced the addition of fixed income in its OMS and Risk & Margin System offering last year. The company planned the go-live for Q2 2024.
The OMS has seen profound enhancements in recent years with more capabilities and broader asset coverage. The solution also covers US and international equities and options, US and international futures and futures options, FX, and crypto.
The Risk & Margin System delivers advanced analytics as a RaaS (Risk-as-a-Service) solution to allow firms to monitor client Reg T, portfolio margin, and custom house policy requirements in real-time. The service includes the ability to view advanced post-execution risk analytics for US and global equities, options, and futures as well as secure FINRA reporting.
Clients will now be able to view fixed income securities in the SRM UI in order to ascertain how the securities contribute to portfolio values and margin requirements. Additionally, users will be able to stress their fixed income securities within interest rate shocks to determine their contribution to portfolio risk.
Sterling said it will use standard FINRA margin requirements for fixed income securities, while allowing for overrides at the company or account level. The firm will also expand capabilities to include mutual funds later this year.
With over 100 clients including leading brokers, clearing firms, and prop groups in over 20 countries, STT provides trading technology solutions tailored to clients’ needs, including trading platforms, OMS, and risk products covering equities, equity options, and futures markets.
