acadia EC2A IM Threshold Monitor User Manual
- June 15, 2024
- Acadia
Table of Contents
FACT SHEET 2023
IM Threshold Monitor
EC2A IM Threshold Monitor
For firms in scope for UMR but unlikely to immediately exceed the regulatory
threshold
The Initial Margin Threshold Monitor service is part of the AcadiaPlus Risk
Suite of services. AcadiaPlus, is a feature rich open platform for Sell-side,
Buy-side and Fund Administrators.
The Initial Margin Threshold Monitor (IMTM) service provides your firm with the ability to track your estimated Initial Margin (IM) exposure as calculated by your dealer compared to your expected IM threshold without the burden of negotiating IM Credit Support Annexes (CSAs) and becoming operationally ready.
About the Regulatory Guidelines:
Recent guidance from the Basel Committee on Banking Supervision (BCBS) and the
International
Organization of Securities Commissions (IOSCO) which is now supported by local
prudential regulators states that firms in-scope for Uncleared Margin Rules
(UMR) can delay their legal documentation, custodian and operational
arrangements if they won’t immediately exceed the framework’s $50 million IM
threshold with their counterparty. But how will these IM Phase 5 and 6 firms
know when they need to begin preparing to move initial margin if they cannot
calculate IM exposure on their own?
Introducing Acadia’s IM Threshold Monitor Service
Part of the AcadiaPlus Risk Suite of services, the IMTM service was developed
in direct response to changing regulation and client feedback. IM Phase 6
firms will have some dealer relationships where they will move initial margin
immediately on go-live but also have others where they won’t. To save time and
money, Acadia has modified our existing service to support IM Phase 6 firms
that want to delay their documentation and operational IM compliance efforts
where possible under the regulations. It is important to note that the
regulations do not extend a grace period to firms who breach the $50 million
IM threshold with their counterparty, therefore having an early warning
mechanism to ensure ample time to repaper your CSAs will be required.
IM Phase 1 through 5 firms can supplement their existing data feeds to Acadia
with anticipated IM exposure information referencing their current variation
margin portfolio versus IM Phase 6 firms, enabling Acadia to provide a central
view of IM Exposure across all in-scope counterparty relationships whether
your firm is moving margin or not. The IM monitor service will provide your
firm with the crucial data needed for a convenient and centralized tool to
track thresholds, ensuring compliance and trading continuity.
IM Threshold Monitor Workflow
Key Features
- Provides a central repository of counterparty IM exposure across firms’ trading relationships
- Ideal for clients that are in scope for IM but don’t expect to move margin until after IM Phase 6 go-live date
- Phase 1 through 5 firms can enable IM Threshold calculation and monitoring via Acadia on behalf of their clients
- Where required, pre-agree IM Threshold amounts and other key terms using Acadia Monitoring Term Sheets
Key Benefits
- Saves your firm time and money by enabling you to delay your operational readiness until you have sight of when you will be required to move regulatory initial margin. In the basic version of the service which is free, Phase 6 firms will receive access to dealer calculated group and agreement level IM collect and post exposure figures as well as sub-threshold breach alerts
- Pre-agree key terms and post sub-threshold breach collective actions
- Provides your firm with an efficient central source of IM exposure rather than manually obtaining bi-lateral dealer information
- Sub-threshold breach alerts to both parties can be generated via API, SFTP or email to proprietary systems
Book a demo or contact us for more information.
Email info@acadia.inc or visit acadia.inc
Acadia is a leading industry provider of integrated risk management services
for the derivatives community. Through an open-access model, Acadia brings
together a network of over 3,000 banks and other derivatives participants,
along with several market infrastructures and innovative vendors.
Acadia® is a registered trademark of AcadiaSoft, Inc. Acadia is an LSEG
Business within the Post Trade division.
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