TS Imagine: leading the way in risk and margin management

If the past two years have taught prime brokers anything, it’s that those with real-time risk and margin management tools at their fingertips have a competitive edge and staying power. Award-winning software platform TS Imagine offers prime brokers the best-in-class tools and user experience to stay on top of their margin game, in a world of volatility, spiking cash calls and Wall Street blowups

2021 was a wake-up call for prime brokers, broker-dealers and their clients. The collapse of family firm Archegos Capital Management hit prime brokers to the tune of billions and shone a light on the inner workings of the industry. Complacency is out, risk awareness and transparency on margin calculations are in – especially as volatility roils markets, clearing houses demand more collateral and regulators up the ante.

TS Imagine in numbers

120+ asset classes covered

60+ exchanges covered for real‑time margin replication

45+ years of experience accumulated across capital markets and SaaS software

13+ years of historical market data feeding analytics engines including curves, time series, scenarios and more

8m+ instruments

This new paradigm requires highly sophisticated risk and margin management tools that historically were widely unavailable; in 2021, investment firm Francisco Partners saw an opportunity to remedy this by uniting specialist providers Trading Screen and Imagine Software.

Trading Screen brings more than a quarter of a century’s experience in trading systems for capital markets, while Imagine Software has over two decades of managing a fully hosted software-as-a-service (SaaS) platform for portfolio and risk management. TS Imagine was created to be a leading global all-asset SaaS provider that aligns trading, risk and operations in a transparent, efficient and scalable way to help companies thrive in capital markets.

RiskSmart: a powerful new tool for prime brokers

Market veteran and ex-head of equities trading at Deutsche Bank Andrew Morgan is now president and chief revenue officer at TS Imagine and says: “The perception from the sponsors at the banks, at the power of this product relative to everything else that’s out there, is phenomenal.”

“TS Imagine was great to work with and we ended up with a system that does all that we were promised it would do. And best of all, due to the flexibility and extensibility of the system, our in-house IT and risk departments can now build sophisticated, customised add-ons to the system. This was a true win-win scenario”

Societe Generale

TS Imagine’s RiskSmart was created to fix the weakest link for prime brokers: system fragmentation. The average risk manager will oversee a patchwork of systems to monitor various asset classes – for listed futures and options, interest rate swaps, foreign exchange, credit, potentially new ones for crypto, and so on. Does this sound familiar? Over time, this fragmentation becomes unwieldy and inefficient – at worst it can lead to the costly errors and front-page splashes seen in 2021 after the demise of Archegos.

Philippe Lacour, TS Imagine

Philippe Lacour, global head of sales at TS Imagine, says: “On top of that, they will have one system trying to do all the analytics which creates a lag. A risk manager will typically use between three and four systems intraday and one end-of-day system with an eight-hour lag before generating the full picture.”

System fragmentation is a risk in itself and too often prime brokers rely on these Frankenstein solutions that are not fit for purpose. TS Imagine’s solution solves this issue by covering all asset classes, offering real-time analytics, scalability, an economical SaaS model and an open platform so users can design solutions to perfectly match their requirements.

When HTF Research asked 20 banks in 2021 how frequently they review client margin, only 15% could do so in real time; the vast majority (65%) review margin on a daily or overnight basis. But this has reached boiling point. Smart prime brokers need to adopt technology that gives them a bird’s eye view of positions and optimises margin management, or risk being caught short when volatility shakes up markets.

TS Imagine’s fully hosted SaaS solution brings everything under one roof – order management, trade execution, portfolio analysis, real-time risk and compliance, margin, accounting, and operations – with secure, cloud-based delivery. RiskSmart not only displays intraday risk across positions among multiple asset classes, but also flags up distressed situations before they spiral, allowing you to identify the source and restore risk to acceptable levels.

Lacour says: “Clients are becoming more sophisticated, trading across regions and assets. The beauty of our system is we operate 24/7 so are always active and up-to-date across different regions and time zones. A risk manager can keep an eye on clients all the time. If a fund takes liberties and increases exposure beyond its risk limits, a risk manager can catch it due to the real-time aspect of the system.”

With 600 clients on both the trading and risk sides, 400 employees across 10 offices worldwide – including 74 new full-time hires in 2021 alone – and IT infrastructure in every major region, TS Imagine is well served to usher in higher standards in prime brokerage. New customers have adopted TS Imagine’s technology, leading to a 21% increase in new business in 2021.

Managing margin: five key challenges you need to understand

• Data dump. Margin calculations are incredibly data-intensive and databases must be able to communicate with each other.
• Transparency rules. Chief risk officers want to know what is driving margin though the roof – and they want to know now. Tomorrow isn’t good enough.
• Workflow can be slow. Calculating margin isn’t always straightforward – it is often non-linear with multiple potential answers, rather like a spider diagram.
• Report it right. Margin calculations need to give actionable info above and beyond ‘this is the profit and loss per client, this is how much margin they need, this is how much we have, this is the surplus/shortfall’.
• Attribution is the why. Attribution analysis helps stakeholders understand the key drivers behind a margin calculation, which is especially important in times of unprecedented margin hikes. In the last quarter of 2021, one clearing member of the National Securities Clearing Corporation had to pay the US clearing house $40.7 billion – the biggest cash call since public disclosures began in 2015.

Find out how TS Imagine’s real-time margin system addresses these challenges by heading to tsimagine.com and speaking to one of its margin experts, or by requesting a demo at tsimagine.com/contact

TS Imagine’s clients praise the power of its products

Andrew Morgan, TS Imagine

Global financial broker ED&F Man Capital Markets was working with three systems for stress tests, margin and end-of-day risk, as well as reconciling data and workflows between systems. It needed a single platform to better serve clients remotely, support business growth and relieve the pain points of managing three systems. Now TS Imagine’s platform displays its risk, profit and loss and margin analytics side-by-side, while lowering its total cost of ownership across exchange and over-the-counter trading.

Stephen Hood, global chief operating and risk officer at ED&F Man Capital Markets, says: “The excellent work of both the TS Imagine and ED&F Man Capital Markets teams has allowed us to successfully deliver on a reduced timeline to integrate, test and go live with the new platform within a few months.”

As client expectations and market conditions spur clients to demand greater transparency, prime brokers are taking advantage of TS Imagine’s technology to leapfrog rival incumbents weighed down by legacy software. Hong Kong-based broker Haitong International Securities, which links up Chinese and overseas capital markets, helped bring its ambitious growth plans to life by achieving a market leading position in Asia in under three years.

We laid down sets of risk management framework for equity derivatives trading; we want it to be mathematically sound, flexible and scalable. TS Imagine provides a robust integration for both real-time risk monitoring and scenario analysis”  

Haitong International Securities

The shake-up in the hedge fund space is attracting newer entrants that can build from scratch and adapt more readily than some more established players. Mr Morgan explains: “There is an opportunity in bringing together an all-in-one solution for start-up hedge funds in particular. One of the key synergies of the merger is that now we can offer clients a trading system that also lets them manage their risk. We already have joint customers so there’s interoperability between the systems, and we are developing a single sign-on with a consistent look and feel. We’re very excited about that area of growth for us.”

Digitisation and automation are set to transform the prime brokerage industry as part of a broader trend in financial services, especially as clients trade increasingly across asset classes, geographies, and time zones. TS Imagine was forged to spearhead this evolution by bringing the benefits of real-time risk and margin management to the industry – and has won the approval of leading market experts. It was awarded Best trading and execution platform in the Hedgeweek Americas Awards 2021 and Best risk management software in the Bobsguide Rankings 2021.

Discover how TS Imagine can help your business address complex and time-consuming workflows in the front, middle and back offices with our innovative, SaaS cloud-based trading, portfolio and risk management software. Head to tsimagine.com to find out more or contact us to request a demo at tsimagine.com/contact

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