Algo Collateral Newsletter

A distinguishing feature of Algo Collateral is a component that expands the product's functionality by allowing customization through the exposure of the core objects.

Algo Collateral is widely recognized for the ease with which it integrates into other trading, risk or back-office products, tools, and even web-based applications. The connection to Algo Collateral is based on COM (Component Object Model) so its business objects can be accessed by applications written in any language with COM interface support.

Algo Collateral consists of a business object layer that forms the foundation of Algo Collateral, and acts as the link between the data and the presentation layer. All Algo Collateral GUIs and services use these business objects. These objects are used to exchange data and invoke all Algo Collateral functionality such as margin calculations, reports, and workflow actions. From Countries and Cities to Collateral Agreements and Actions, Algo Collateral gives users the ability to create their own interfaces and GUIs, to customize the existing GUI, or integrate functionality within other systems.

Algo Collateral library objects are fully accessible by COM. Using COM allows you to instantiate and use objects that have already been developed and compiled without having to compile the original source code into your project.

Benefits of Algo Collateral business objects:

• Shorter development cycle  The learning curve is short with ready-to-use code, and developers can concentrate on designing thorough solutions rather than arduously coding them.
• Greater flexibility - Users can rapidly adapt to changing business needs, without relying on new releases or custom development.
• Seamless integration  Algo Collateral business objects enables users to incorporate Algo Collateral functionality within other applications. For example, new screens can be added within the standard Algo Collateral GUI, such that the user is unable to distinguish between standard and added functionality.
• Consistent calculations - Take advantage of Algo Collateral's business logic: you can re-use, for example, the algorithms used to perform margin calculations or perform eligibility checks. Therefore if you request a collateral balance from the business object layer, you can be sure that this will result in the same value viewed in the standard GUI.
• Straight Through Processing - Users can extract and post messages to messaging queues. Algo Collateral can also accept incoming data and trigger actions accordingly (e.g. run a margin calculation when a new credit rating is received).

The rest of this newsletter will discuss the different ways that Algo Collateral users can implement the business objects within their organisation.

Front Office
Algo Collateral's business objects can be used to monitor margin requirements (such as a margin call or an anticipated demand) as soon as a new trade is executed/booked in a trading system.

Margin algorithms and queries already implemented in Algo Collateral do not need to be duplicated in external modules because the business objects will collect all of the required static information, margin calculation methods, and related business logic to perform such functions.

Credit
Clients can exchange collateral balance information between their credit system and Algo Collateral, or verify their current level of exposure and collateral balance (i.e. if a counterparty is rumoured to be close to default).

In the former, clients re-use the Algo Collateral 'Collateral Container' object to retrieve the collateral balance of an Agreement in a single line of code, which can be broken down to the Product or Issue level, and can be split between Initial and Variation margin just by adjusting parameters provided to the Collateral Container objects Get_Values method. A similar procedure without Algo Collateral business objects would have required much more coding and a detailed knowledge of the data model.

Audit
Algo Collateral business objects, combined with standard security capabilities and views, allows for controlled access to the Algo Collateral database, thereby enforcing any rigorous internal audit demands. By following a defined implementation pattern, clients have been able to share user ID's, implement proprietary encryption schemes or restrict access to the Database using other tools e.g. SQL editors.

Operations & Accounting
Integration with other systems is perhaps the most common requirement among all Algo Collateral users. Business objects enables clients to automatically inform settlement and accounting departments of collateral movements and keep each system synchronised.

For example, a client has used Algo Collateral business objects to extract collateral movements in the workflow. The movement is published to a message queue, monitored by the organisation's settlement system. The business objects layer is used to update the status of the movement to show when the message has been processed and when the movement has been completed or has failed.

Algo Collateral Version 4.0 now allows users to automatically transition events in the collateral movement workflow.

Web Reporting
Algo Collateral business objects supports the publication of collateral reports to the web. Counterparties can view published Margin Call notices and Collateral Statements that an Algo Collateral user had posted on their web site.

The latest version of Algo Collateral Web Reporting uses business objects to interact with the workflow. For example, a counterparty logs on to the web site and indicates that they agree with a particular call. The business object layer feeds this acceptance into the workflow and automatically transitions the event associated with the same call to its next state.

Developer Tools
In future releases of Algo Collateral, new tools will be added to help developers understand and use the object model, including details of each object, a description of their respective functionalities, their relationship with other objects, and a list of their computed fields. A developer would then be able to find the sub-object names associated with the Collateral Agreements object. The developer will also be able to look up the Collateral Trades object to find the name of the computed fields they can extract using business objects e.g., the PV of a particular collateral in the system currency.

User Defined Screens
In addition to the new external table functionality in Version 4.0, Algo Collateral will allow users to create their own screens and incorporate them within the GUI. These screens can be controlled through business objects.

Re-Use of Active Connection For All External Modules Types

To date, only the API External Module has provided a reference to the current database connection (clsSentryDB). This connection reference is useful because users do not need to make a separate connection to the database to use the objects. In future releases of Algo Collateral, the clsSentryDB reference will be accessible for the other External Module types (e.g. Events, Metrics, and Reports etc).