IHS Markit has partnered with AcadiaSoft to help the non-cleared derivatives community comply with margin regulation.
Potentially, more than 1,000 firms will be brought into scope in phase four (September 2019) and phase five (September 2020).
In connecting their platforms, the integration will help shared customers of IHS Markit and AcadiaSoft achieve straight-through processing (STP) for the entire margin lifecycle, which includes negotiating margin terms, calculating the initial margin for each trade, and valuing and exchanging collateral daily.
Key contractual terms from margin and custodial agreements generated by IHS Markit will be transmitted to AcadiaSoft’s Agreement Manager, and risk sensitivities calculated by IHS Markit will power the Initial Margin Exposure Manager, part of the AcadiaSoft Hub.
Margin reconciliation data from AcadiaSoft will be channelled to users of the initial margin calculation and collateral management services from IHS Markit.
Nosheen Amir-Ebrahimi, managing director and product head, derivatives data and valuation services at IHS Markit, said: “The regulatory requirements for initial margin are complex and to meet fast-approaching compliance deadlines, phase four and five firms need to have the right technology in place as soon as possible.”
She added: “Creating seamless connections with AcadiaSoft is part of how we are helping in-scope firms reduce the cost of compliance and technology.”
Chris Walsh, CEO of AcadiaSoft, commented: “A cornerstone of AcadiaSoft’s strategy is the ability to integrate with key vendors to provide effective straight-through solutions that are simple to adopt.”
He added: “Our alliance with IHS Markit further demonstrates our commitment to our clients as we continually adapt to help them navigate today’s regulatory environment.”
Darren Thomas, managing director, regulatory and compliance at IHS Markit, said: “The integration of Margin Xchange from IHS Markit to automate and structure complex margin and custodial legal agreements and store contract data with AcadiaSoft brings together all the necessary components for STP across the margin lifecycle.”
He said: “Customers will be able to manage the margin cycle holistically end-to-end from agreement creation to margin calculation and settlement with greater ease and efficiency.”
