Cetip S.A. — Mercados Organizados

Securities firm provides market transparency and equips participants to make better strategic decisions

Published on 06-Sep-2013

"We are the first noncentral counterparty to offer a solution to mitigate risk in our country’s OTC derivatives market. Moreover, because we are able to calculate exposure, we can introduce other new services and products." - Wagner Anacleto, chief operating officer

Customer:
Cetip S.A. — Mercados Organizados

Industry:
Financial Markets

Deployment country:
Brazil

Solution:
Algorithmics Solutions, BA - Business Analytics, BA - Risk Analytics, Smarter Planet

Overview

Established by the National Monetary Council (CMN) in 1984, Cetip S.A. — Mercados Organizados started its operations in 1986 as a marketplace for private fixed-income securities and over-the- counter (OTC) derivatives in Latin America.

Business need:
The company needed a way to accurately analyze changing market variables with details of each transaction and calculate derivatives pricing on a daily basis.

Solution:
It can now help financial institutions gain visibility into risk exposures in derivatives trading, reducing the systemic risk of each transaction as well as providing transparency for market regulators.

Benefits:
Cetip can now provide more services to market participants to help them gain visibility into exposures in trading derivatives.

Case Study

Established by the National Monetary Council (CMN) in 1984, Cetip S.A. — Mercados Organizados started its operations in 1986 as a marketplace for private fixed-income securities and over-the- counter (OTC) derivatives in Latin America. The Rio de Janeiro- based company is now among Latin America’s largest depositories of fixed-income securities and one of Brazil ’s largest private asset

clearinghouse. The firm, which became publicly held in 2009, serves approximately 15,000 participants across a broad range of financial institutions, such as banks, brokers and dealers, real estate companies, pension funds, insurance companies and nonfinancial companies that issue securities and others authorized to operate in financial and capital markets. With approximately 140,000 transactions daily and more than USD20 trillion in assets and derivatives under custody,
the company offers services related to registration, central securities depository (CSD), trading and settlement of assets and securities.

The Opportunity
Rio de Janeiro-based clearinghouse Cetip S.A. — Mercados Organizados saw an opportunity to help market participants gain visibility into risk exposure in trading over-the-counter (OTC) derivatives. The company needed a way to accurately analyze changing market variables with details of each transaction and calculate derivatives pricing on a daily basis.

What Makes It Smarter
The company built a proprietary system based on a sophisticated risk management solution to provide additional services to its OTC market participants. It can now help financial institutions gain visibility into risk exposures in derivatives trading, reducing the systemic risk of each transaction as well as providing transparency for market regulators.

Real Business Results
Cetip can now provide more services to market participants to help them gain visibility into exposures in trading derivatives. By providing mark-to-market calculations daily for each transaction, such as margin requirements to determine whether or not a margin call is necessary, Cetip enables market participants to make better trading decisions. And by using a standardized mark to market, the company enables transparency in the OTC derivatives market that helps mitigate systemic risks.

For more information
Please contact your IBM representative or IBM Business Partner. Visit us at ibm.com.

To learn more about Cetip S.A. — Mercados Organizados, visit
www.cetip.com.br.

Products and services used

IBM products and services that were used in this case study.

Software:
Algo Market Risk

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America August 2013 IBM, the IBM logo, ibm.com and Algo Market are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON- INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.


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