Risk Management with Capital Efficiency
- Physical and financial contracts to minimize collateral and risk
capital requirements in compliance with the CFTC rules pursuant
to the Dodd-Frank Act.
Alliance's team of seasoned professionals bring experience in Chief Risk Officer credit risk management, defining structures that support trading which minimizes collateral requirements at cash-constrained companies, understanding of exchange trading through Futures Commission Merchants (FCMs), ISO/RTO credit and risk management, and applying Dodd-Frank and related exchange regulations. This experience base enables Alliance to support clients in a number of ways to achieve risk management with capital efficiency and enhanced profitability.
Alliance offers a full Chief Risk Officer Service for small to medium-sized companies. This service performs all of the functions that a full-time Risk Officer would provide including the creation of a risk policy manual, execute training of staff and awareness to the Board of these policies, and monitor trading behavior.
As an extension of the risk officer support service, Alliance provides an independent risk management function that meets the participation requirements of the ISOs/RTOs. Alliance also provides lenders an "industry smart" way to independently monitor the credit and market risk of its borrowers. Furthermore, with its exchange and Dodd-Frank and EMIR (European Market Infrastructure Regulations) expertise, Alliance helps entities update their trading and risk policies in light of such rules.
Alliance provides more than risk management -- it provides risk management with capital efficiency. Alliance helps companies evaluate the cash liquidity and collateral impacts of alternate trading strategies, including risk capital to reserve to support its trading activities -- especially under Dodd-Frank and ISO/RTO evolving rules. To help companies achieve capital efficiency while meeting commercial objectives, Alliance helps companies identify the desired portfolio of OTC netted vs. exchange trades, OTC vs. ISO/RTO trades, and physical vs. financial trade mix. Going further, Alliance helps companies establish structures (e.g., lien-based financing) to minimize the capital impacts of the desired portfolios. All of this is consistent with Alliance's over-all thrust to convert risk into resource as an opportunity to enhance resiliency and profitability for companies, as discussed further under "Executive Management Consulting".