Hazeltree, the leading provider of integrated treasury management and portfolio finance solutions, and HedgeLegal, the emerging leader in trading document negotiation for the buy-side, published “Clearing up the Uncleared Margin Rules: A Comprehensive Guide for Hedge Fund and Asset Managers.” The guide is intended to assist hedge funds and asset managers in gaining a better understanding of their obligations under Phases 5 and 6 of the Uncleared Margin Rules (UMR or Rules).
While ISDA and other trade associations have asked for a delay in the onset of UMR amidst the COVID-19 pandemic, there has been no sign (as of yet) that global regulators are inclined to allow any such delay. This implies that over the next 18 months, more funds will become subject to the Rules – and it is now critical for every manager to assess whether their funds will be impacted. The guide describes the decisions that managers will need to make in assessing whether their funds will fall within the Rules and, if they come in scope of the Rules, how to prepare for the needed changes.
“The onset of UMR represents a significant and complex event for buy-side firms,” said Joseph Spiro, director of Product Management from Hazeltree, in a statement. “This guide adds clarity to complicated topics and is a great resource as hedge funds and asset managers consider their impending needs.”
“HedgeLegal’s expertise in collateral documentation combined with Hazeltree’s expertise in collateral operations made for a great collaboration,” said Poseidon Retsinas, founder & CEO of HedgeLegal, in a statement. “The resulting guide covers all the bases.”
Managers have many decisions to make surrounding the new Rules for initial margin (IM). Funds falling within the Rules will be required to make a series of comprehensive changes to their operations and legal agreements. This guide is intended to assist in educating the market on the challenges ahead.