AcadiaSoft announced that Nordea will outsource its initial margin (IM) backtesting to AcadiaSoft. The IM Backtesting and Benchmarking Service was launched in 2018 as part of its partnership with Quarternion to provide risk services for firms subject to IM requirements for the non-cleared derivatives market.
It helps firms meet the requirements for ISDA SIMM (Standard Initial Margin Model) validation by providing both back-testing of SIMM over a historical period and benchmarking SIMM against three industry-standard risk methodologies. Outsourcing this complex reporting means firms that are in-scope for the uncleared margin rules can expect to reduce costs and improve efficiency.
Michael Kjørtsholtsen, head of Risk Control at Nordea, noted in a statement that the reporting can be used as documentation of compliance with IM backtesting and benchmarking requirements to regulators.