At the FIA EXPO 2023 in Chicago, John Lothian News interviewed the minds behind Cumulus9: Founder & Managing Director Giuseppe Fiocco and Managing Director Rafik Mrabet. They shared how this financial technology startup is revolutionizing margin transparency and risk management for futures commission merchants (FCMs) and their clients.
Cumulus9 was conceived from Fiocco’s experience at ICE Clear Europe, recognizing the industry’s need for clarity in margin changes which significantly impact FCMs’ liquidity. To tackle this, Fiocco developed a solution within an FCM and then created Cumulus9, which today has a team consisting of ten professionals with CCP backgrounds from ICE and LME.
The company targets FCMs burdened by the complexity of managing margins across various exchanges. Cumulus9’s platform connects to more than 80 exchanges worldwide and caters to clients ranging from commodity trading to prop trading firms, offering not just intraday margin calculations but also a deeper insight into their risk profiles through comprehensive analytics.
Fiocco and Mrabet said their participation in the Innovators Pavilion at FIA EXPO was a resounding success, helping to establish new partnerships and cementing their position as innovators. Cumulus9 differentiates itself by providing an “additional layer of explainability,” helping customers understand the reasons behind margin calls through historical P&L calculations, VaR analysis, and stress testing, thus optimizing capital use and anticipating market stresses.
Competitors like Open Gamma and Cassini might offer margin calculation and collateral management, but Cumulus9’s predictive technology and service for non-standardized portfolios set it apart, Fiocco said. In fact, during critical service outages earlier in the year, Cumulus9 was the only one capable of calculating risk for non-standardized positions.
AI integration is the next frontier for Cumulus9, aiding in standardizing contract symbologies and error detection in position files, a task made challenging by the sheer volume of data. By marrying AI with human intelligence, Cumulus9 is ensuring error-free submissions for risk analysis, further enhancing their service robustness, Mrabet said.