Software provider for management, risk oversight and operational control of structured finance investments Principia announced its latest development of system enhancements aimed at addressing the Market Risk Final Rule for securitization investment guidelines.
The rule implemented due diligence requirements for banks that must now demonstrate adequate independent credit analysis, risk management and timely reporting when investing in structured finance assets.
Principia's updated structured finance platform will now deliver projected cashflow and asset interfacing capabilities to utilize market pricing, collateral performance and cashflow models from leading data providers in the investment industry.
Following the released rule, the American Securitization Forum unveiled an implementation guide for its members, following consultation with the market about how the best address the due dilligence standards.
"Securitization investors need the operational capabilities to access and make use of all the relevant data that will allow them to understand, manage and report on the key structural features and collateral performance of transactions," executive director Tom Deutsch of ASF said.
He added, "The Dodd-Frank Act has forced the U.S. bank regulators to a system where credit ratings cannot be used as a benchmark for credit worthiness for ABS and MBS."
Principia's latest software development will allow for analysis and workflow control of the securitization market including mortgage-backed securities and structure credit investments.
"This is the culmination of work to deliver a complete, out-of-the-box solution for credit investment portfolio management. U.S. banks can quickly tick the boxes outlined in the ASF guidelines for implementation," executive vice president of product strategy Douglas Long at Principia said.
He added, "The solution can increase efficiencies by eliminating risky and time consuming manual inputs and cumbersome spreadsheet integration, bringing together all the necessary information and tools to effectively run the structured finance business."