Variable rate securities are a growing niche in the short term marketplace. START turns what used to be repetitive, time-consuming tasks into a few mouse clicks. Below are some of the features that are specific to variable rate securities.
Pricing
- Simplified security pricing allows traders to group together securities with similar properties and price them in bulk. For example, you can create a group that includes all daily taxable California securities and give them all a similar rate. You can even price your securities off an index like LIBOR or 30 Day CP and give it an offset. And, as always in START, you can price individual deals if you desire.
- Traders use the rate worksheet to price security groups. When ready, the traders can release the rates, which are then fed to the buy-side investors, issuers, trustees, and obligors using STARTex. Bloomberg's BOOM and Thomson's MMD are also fed similar data. It also automatically executes any suspended trades which were rating for the rate to be set.
- Contacts can be assigned to each security and as rates are released, Rate Reset Alerts and Accrual Summaries can be delivered to these contacts.
Billing
- Like all features in START, access to the billing component can be given exclusively to a certain set of users responsible for billing.
- Securities are placed into Invoice Groups, which are sets of securities that are included on one invoice to be sent to one or more issuer contacts. This greatly reduces the amount of paperwork the issuers have to sift through.
- The look-and-feel of the invoice itself is fully customizable, allowing your firm to put its own language and instructions throughout the document. It can contain your logo and legal text, as well as custom instructions for payment.
- Users can easily create invoices and deliver them with the click of a button.
- Payments can be applied to a single open invoice or allocated to several. The system properly handles overpayments, underpayments, credits, balances, and write-offs.
Trading
- Similar to other products supported by START, your firm can show out its inventory in variable rate securities. The system also displays the activity in each security for the next five business days.
- Ability to generate block trades and then allocate them at a later time to individual investor accounts.
- Customizable trading rules allow for various restrictions on cash trading, trade entry times, and allowable settlement dates.
- Real-time Trade Monitor watches for new trades requiring approval (like those entered from STARTex or Bloomberg's BOOM). Privileged users have the ability to approve or reject these trades. Trades that are not approved or rejected will expire and the inventory requested is released.
