Navigating Uncleared Margin Rules –
time to act
Are you ready for the final phase of the Uncleared Margin Rules?
The requirement to post initial margin for non-cleared derivatives was one of the main post-financial crisis reforms
For most banks, a prescriptive risk-based calculation methodology should be used to compute initial margin, but this brings challenges: complex calculations, heightened reconciliation issues and increased volumes of collateral margin calls.
Main challenges
Multiple margin calls
upon breaching threshold, firms will need to agree both a pledgor and secured call with their counterparts
Threshold monitoring
only need to exchange collateral where IM calculation breaches agreed threshold
IM calculation method
SIMM or GRID
Collateral usage
securities must be priced and used as collateral, cash is effectively ineligible
Collateral segregation and instruction
pledgor and secured assets must be held in segregated accounts at a third-party custodian or triparty agent
Finastra and CloudMargin have partnered to meet all of your UMR needs
Benefits Finastra offers with CloudMargin
- No client build
- Rapid implementation
- Nothing to install or upgrade
- Automation
- Optimization
- Dispute handling
- Customizable reporting
- Connectivity, Centralize
- ISDA SIMM certified
Are you ready for the final phase of the Uncleared Margin Rules?
Let's talk!
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