March 08, 2016 09:00 AM Eastern Standard Time
NORWELL, Mass.- Twenty-eight of the worlds largest banks are participating in industrywide testing of the first ever Central Margining service for non-cleared OTC derivatives, which was released by AcadiaSoft, Inc. and delivered in collaboration with TriOptima last month.
Industry testing of the AcadiaSoft Collateral Hub marks the successful completion of the first phase of a high profile industry initiative around electronic margin management announced last July. With the successful release and testing of two-way Central Margining for Initial Margin (IM), AcadiaSoft, in partnership with TriOptima, has confirmed usability for its platform for straight-through-processing of derivatives margins. The new service will facilitate industry compliance with impending margin regulations coming into effect in September.
I am amazed by the industrys ability to define a shared solution to a regulatory development and then get behind it so quickly and effectively, said Chris Walsh, Chief Executive Office of AcadiaSoft. Thanks to such widespread industry support, we have been able to deliver on an ambitious product plan in only six months- and we are on target to deliver end-to-end straight-through-margining for non-cleared OTC derivatives via the Hub by Summer.
The release is the first phase in linking AcadiaSofts platform with TriOptimas triResolve service. This linking enables market participants to calculate and reach agreement for exchanging initial and variation margin amounts; identify and reconcile differences; and prevent disputes.
Testing the AcadiaSoft Collateral Hub provides banks with the opportunity to refine and calibrate their margin processes six full months ahead of the implementation of the new margin regulations this coming September, said Mark Demo, Regulatory Product Director at AcadiaSoft. We make it possible for industry participants to automate and scale their margin processes to meet the challenges of complying with the new regulations.
A new margin framework established by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) and legislated by local prudential regulators around the globe is expected to take effect on September 1. The largest banks that trade non-cleared OTC derivatives will be required to post and collect additional margin and standardize their collateral terms and processes. When fully implemented over the next five years to bring mid-sized banks and many asset management firms under the regulatory umbrella, the regulations will result in a substantial increase in margin calls and associated collateral movements that will require a fully automated margin process.
About AcadiaSoft, Inc.
AcadiaSoft, Inc. is a financial industry collaborative that is uniquely focused on delivering margin automation and standards for counterparties engaged in collateral management. AcadiaSoft allows market participants to communicate vital information on exposures, commitments and adjustments between counterparties in a complete, verifiable and secure manner.
Owned and backed by the investment of 16 major industry participants and infrastructures, the AcadiaSoft community has grown to over 250 member firms exchanging approximately $200B of collateral on daily basis. The Companys growth has been driven by regulatory change in the derivatives industry that is increasing the demand for automated, transparent and verifiable collateral management.
AcadiaSofts Advisory Groups, Best Practice Forums and Working Groups provide a unique framework for integrating the thought leadership and capabilities of market participants, market infrastructures and key service providers across the industry.
AcadiaSoft is headquartered outside of Boston in Norwell, MA and has offices in London and New York.
For more information, see www.acadiasoft.com.