The insidious presence of COVID-19 and its impact on society and the financial markets knows no bounds. The financial markets have been in meltdown causing huge volatility and increased margin call volumes, thus causing firms to re-evaluate their priorities where Phase V UMR compliance is concerned. Firms are now having to take a more tactical approach and ensure the continued operation and the management of market risk is paramount in a period of such severe market volatility. The current situation is even further exasperated as firms have been forced to execute business continuity plans and enforce remote working for all employees. For these reasons, we believe it’s vital that global regulators agree a delay to the next phases of initial margin (IM) implementation until the situation and impact of coronavirus becomes clearer. This position has been set out in a letter, signed by 21 trade associations, which has now been sent by ISDA to regulators.
Institutions that were due to be impacted by UMR Phase V, were already breathing a huge sigh of relief after the Basel Committee and IOSCO recently announced a one year extension. Firms with an AANA of greater than Eur 8 billion, but lower than the interim Eur 50 billion threshold, were due to begin exchanging Initial Margin in September 2021…12 months later than the original mandated date. However despite the stay of execution as a result of the aforementioned and the impact of COVID-19 , it is absolutely imperative firms continue the journey towards regulatory compliance. Streamlining IM requirements is much greater than purely choosing between schedule based IM and SIMM calculation methodology. Firms need to take a strategic, rather than tactical approach to maximising automation, reducing risk, ensuring connectivity to Triparty agents and CCP’s, optimisation and efficient inventory management and reporting requirements.
Available in the cloud or on premise VERMEG’s award winning cross product collateral, inventory and optimisation solution can support all of your regulatory and strategic collateral needs. With its unique dynamic calculation engine, automated end-to-end margin workflow, array of sophisticated risk and trade analytics and intuitive configurable dashboards, Colline enables efficient and effective collateral management. Through the power of Colline institutions are able to evolve and optimise legacy processes to provide the true transparency and control required to transform back office domiciled processes into key drivers of P&L. Furthermore VERMEG offers wider functionality direct, or via accredited “best of breed” partners in our collateral ‘Ecochain’ solutions program for Data Management, Peer to Peer Repo markets, Electronic Messaging, Trade Analytics and Real Time settlement infrastructures.
Contact us for more information pertaining to how VERMEG can accelerate the journey to UMR compliance, collateral mobilisation and competitive edge.