AcadiaSoft, an industry provider of margin automation solutions for counterparties engaged in collateral management worldwide, announced a number of industry milestones that have been achieved via its services through Q1 2019 and a new Risk Services Suite that will support buy-side firms coming into scope for Phase 5 of the uncleared margin rules in September 2020. The announcements come as AcadiaSoft is participating in the 34th ISDA Annual Group Meeting in Hong Kong this week.
More automation, less operational risk
On average, AcadiaSoft MarginSphere clients electronically exchange OTC bilateral margin calls and agree collateral movements on more than 190,000 active Variation Margin (VM) CSA agreements each day, as well as more than 2,000 active regulatory Initial Margin (IM) CSA agreements.
“We estimate that our latest volume figures represent more than 60% of total active OTC bi-lateral VM CSAs and more than 99% of total IM CSA agreements industry-wide,” said Chris Walsh, AcadiaSoft CEO, in a statement.
As of March 31, 2019, regulatory IM exposure calculated from a collect perspective and reconciled on AcadiaSoft’s Initial Margin Exposure Manager service exceeded $131 billion for the 43 counterparty groups included in IM Phases 1, 2 and 3. This surpasses the latest regulatory IM collected figure of $84 billion as of December 31, 2018, as published in the 2018 ISDA Annual Survey. AcadiaSoft estimates that firms using its IM optimization products have reduced their overall IM exposure in the Rates and FX asset class by up to 50% while reducing Equity IM exposure by an average of 35%.
AcadiaSoft’s Risk Services Suite provides a complete set of low-touch services and functions that buy-side firms are required to implement for uncleared margin rule compliance in September 2020 that continue to build on the industry standards for reconciliation and calculation of initial margin. The Risk Services Suite provides access to AcadiaSoft’s AgreementManager, Sensitivities Calculation, IM Exposure Manager and MarginManager services as well as connectivity to all IM Phase 1, 2 and 3 firms.
100% industry margin automation initiative
More than 11 million messages were processed in 2018 via the AcadiaSoft Hub platform — a 50% increase over 2017 volumes. Through its Industry Margin Automation (IMA) initiative, AcadiaSoft provides a number of automation services.
- Relay Service, which uses artificial intelligence to read emails and convert the contents into an XML message to then feed into MarginSphere. Year over year Relay volumes increased 64% from 2017 to 2018.
- MarginManager, which provides firms with a single, secure web-based portal to send and receive margin calls and agree and pledge collateral movements for all products. MarginManager is fully integrated with AcadiaSoft’s MarginSphere platform as well as its IM Exposure Manager and Cash Interest reconciliation service. More than 600 organizations now use MarginManager on a daily basis;
- An extension of MarginManager’s automation capabilities to support MSFTA/TBA and Repo margin agreements. Repo margin call volumes increased more than 400% from 2017 to 2018 and MSFTA/TBA volumes increased 12 fold over the same period.