BNY Mellon has incorporated AcadiaSoft’s initial margin (IM) risk suite of tools for margin calculation, reconciliation and messaging into its collateral service offering.
In conjunction with BNY Mellon’s existing bilateral margin capabilities from post-trade and settlement through to collateral segregation and ongoing position monitoring, the aim of this is to enable buy side clients trading derivatives to meet their obligations under phases 4 and 5 of the uncleared margin rules (UMR) all in one place.
Under the rules, counterparties are required to calculate IM on uncleared derivatives trades. Depending on the portfolio in question, these calculations may be numerous and complex, and are required to be computed daily.
AcadiaSoft acts as a central repository for calculating IM, allowing market participants to use the utility as a single point of contact through which to conduct their messaging and calculations.
“Our aim is to streamline the collateral workflow for clients, making it easier for them to meet their regulatory requirements. Adding the AcadiaSoft functionality means they’ll only need to share their derivatives portfolio with us once daily; thereafter, we’ll calculate their IM and instruct the movement of the collateral required accordingly,” explains Jonathan Spirgel, global head of liquidity and segregation services at BNY Mellon.
“We’re thrilled to be able to offer buy side derivatives market participants access to AcadiaSoft’s IM calculation and reconciliation services for the very first time through BNY Mellon,” says Chris Walsh, CEO of AcadiaSoft.