TriOptima, which is part of CME Group, has extended its collaboration with AcadiaSoft to automate monthly collateral interest payments, making trade processing more efficient for over-the-counter (OTC) market participants.
According to International Swap Dealers Association (ISDA) data, cash collateral accounts for around 70% of all collateral exchanged for non-cleared derivatives, equivalent to $1.3 trn in 2019 alone.
The trade group says a significant chunk of this market still relies on email and manual reconciliation to manage the interest process. The expanded support for AcadiaSoft’s new payments messaging should generate greater efficiencies.
“Our clients are aiming to automate large parts of their collateral management lifecycle as they prepare for upcoming phases of the uncleared margin rules (UMR),” said Neil Murphy, business manager at TriOptima.
He added, “Enabling clients to process interest in an efficient way, that allows reconciliation of underlying balances and automated matching, is part of that process. triResolve Margin connects more than 200 counterparties to the AcadiaSoft network; hence this collaboration automatically provides the wider market with improved post-trade processing capabilities.”
Mark Demo, head of community development at AcadiaSoft, said, “It’s another step toward complete collateral process automation and will help more firms reduce the amount of time required to complete their monthly cash collateral interest process. It also builds on our goal of increased network connectivity across the industry.”
The UMR involves the mandatory exchange and segregation of initial margin (IM) on non-cleared derivatives trades. In April, the Basel Committee and International Organisation of Securities Commissions (IOSCO) delayed the final two final implementation phases by one year due to disruptions caused by the coronavirus pandemic.
Buyside firms with derivatives of a notional value exceeding €8 bn now have until 2 September 2022 to comply while those with derivatives of a notional value exceeding €50 bn will have until 1 September 2021, one year later than originally planned.
Four years ago, TriOptima, launched post trade service, triResolve Margin, a web-based, end-to-end margin processing solution delivered in partnership with AcadiaSoft.