TriOptima has expanded its triResolve Margin collateral management service to support automated SWIFT payment capabilities, which will help TriOptima clients in-scope for phases five and six of the BCBS/IOSCO Uncleared Margin Rules (UMR).
Asset managers, pension funds and insurance companies are scheduled to start posting initial margin (IM) for non-centrally cleared derivatives under UMR based on their volume thresholds either with phase 5 on 1 September 2020 or phase 6 on 1 September 2021.
The addition of SWIFT connectivity means TriOptima clients in-scope for phase five and six of the BCBS/IOSCO UMR will now be able to instruct SWIFT payments directly via the platform.
According to TriOptima, clients will be able to automate the full collateral management process across both initial and variation margin.
Meanwhile, institutions that are not connected to the SWIFT network typically have to log on directly to their custodian’s web interface to key in their settlement instructions manually every day, a spokesperson said.
The spokesperson explained that apart from being a time consuming and onerous task this also introduces an additional operational risk that in the worst case could lead to settlement failures.
The new settlement automation service offers clients instant connectivity to the SWIFT network for cash transfers and securities settlement, as well as direct access to a range of custodians and tri-party agents.
Currently, there are over 11,000 institutions connected to SWIFT including tri-party agents and custodians.
This means that TriOptima has access to all connected custodians and tri party agents, which presents an opportunity to clients who currently lack SWIFT support in their current settlement process.
Raf Pritchard, executive director, head of triResolve, commented: “Collateral settlement is often a manual and onerous task for firms, often requiring them to log into a custodian's portal or even use a fax.”
"Combining triResolve Margin with a centrally hosted SWIFT infrastructure removes the headache of connecting to multiple custodians, helping clients to lower transaction costs and significantly reduce settlement risk,” Pritchard added.
