Infrastructure service provider TriOptima’s triResolve Margin, is offering direct connectivity via SWIFT, to the four main tri-party agents – BNY Mellon, Clearstream, Euroclear and JPMorgan, ahead of the impending Uncleared Margin Rule (UMR) in September.
TriOptima’s clients will be able to send instructions as well as receiving status messages and end of day reports.
The UMR involves the mandatory exchange and segregation of initial margin (IM) on non-cleared derivatives trades. Phase 5 covers buyside firms that have an aggregate average notional amount (AANA) of more than $50 bn.
They will need to ensure they have the right infrastructure in place to exchange IM efficiently. This involves conducting IM calculations, proactively monitoring their exposure and integrating with tri-party agents.
Triparty agents are well established and their offering comprises receiving and matching client instructions across various types of transaction as well as valuing collateral assets and calculating net exposures.
They also are tasked with real time selection and allocation of collateral allocation from the available collateral inventory as well as event and substitution management.
“Extending the margin call process to incorporate instructions to the custodian reduces the manual steps in the process which ultimately reduces the risk of delayed or failed settlements,” says Joakim Strömberg, Head of triResolve Solutions, TriOptima. “By using our SWIFT automation, clients do not have to build and maintain their own integration to the tri-party agents.”
Ted Leveroni, Head of Margin Services, BNY Mellon added, “With just a few weeks to go until the September go-live, and the bigger challenges to come in phase six, TriOptima’s integration with SWIFT will greatly expedite the onboarding process for mutual clients turning to our firm to connect them to the services they need to meet their UMR obligations.”
Olivier Grimonpont, Head of Global Collateral Management at Euroclear, also believes that “By integrating into the four main tri-party agents; TriOptima offers buyside firms’ easier access to tri-party services, further facilitating preparations for UMR phase five. Ultimately, the broader adoption of tri-party services that interlink margin and settlement processes will reduce risk, meet regulatory requirements and improve market efficiency,”
©Markets Media Europe 2021