Margin

Derivatives, Pro-cyclicality, Regulatory

ESRB, Margin, OTC derivatives, SA-CCR, securities finance, topstory

The European Systemic Risk Board published last week an innocuously titled document called “Mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions“. The early pages,…

Bank of England: Simulating liquidity stress in the derivatives market

December 22, 2019

Bank of England, collateral calls, Margin, OTC derivatives, Repo

By Marco Bardoscia, Gerardo Ferrara, Nicholas Vause and Michael Yoganayagam We investigate whether margin calls on derivative counterparties could exceed their available liquid assets and, by preventing immediate payment of the…

J.P. Morgan and Baton automate derivatives margin payments using DLT

November 14, 2019

News and Notes – Fintech

automation, Baton Systems, collateral management, derivatives, DLT, J.P. Morgan, Margin

Baton Systems, a provider of distributed ledger-based post-trade solutions for capital markets, and J.P. Morgan have developed a solution that enables the near real-time orchestration of cash and collateral transfers…

Basel Committee and IOSCO announce one year delay on phase 5 margin implementation for OTC derivatives

July 23, 2019

Basel Committee, IOSCO, Margin, OTC derivatives, Phase 5, UMR

The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) acknowledge the progress that has been made to implement the framework for margin requirements for non-centrally…

SEC and CFTC propose lower margin rules for security futures

July 3, 2019

CFTC, Margin, sec, security futures

The Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission (“SEC”) (collectively, the “Commissions”) are proposing amendments to regulations that establish minimum customer margin requirements for security futures.…

Bloomberg: Democrats Back Wall Street Push to Free Up $40 Billion in Margin

June 28, 2019

affiliates, Bloomberg, collateral, Margin, US Democrats

A group of House Democrats is pressing bank regulators to roll back a rule that forces the biggest Wall Street firms to set aside as much as $40 billion as…

Basel Committee finalizes Leverage Ratio revisions for client margin and window-dressing for SFTs

June 27, 2019

Basel Committee, Leverage Ratio, Margin, SFTs, window-dressing

The Basel Committee on Banking Supervision today released a revised treatment of client cleared derivatives for purposes of the leverage ratio. The Basel Committee also issued a revision to the…

SEC Adopts Capital, Margin, and Segregation Requirements for Security-Based Swap Dealers and Major Security-Based Swap Participants and Amends the Capital and Segregation Requirements for Broker-Dealers

June 21, 2019

capital, Margin, sec, security-based swap dealers

The Securities and Exchange Commission took another significant step toward establishing the regulatory regime for security-based swap dealers today by adopting a package of rules and rule amendments under Title…

Reuters: Hong Kong to cap securities margin financing

April 5, 2019

HONG KONG, April 4 (Reuters) – Hong Kong’s financial markets watchdog plans to limit the amount brokers can lend against shares to five times their capital. Margin financing is an…

Deutsche Bank will use CloudMargin’s public cloud for collateral infrastructure

February 7, 2019

News and Notes, News and Notes – Fintech

cloud technology, CloudMargin, Collateral Management IT, Deutsche Bank, Margin

According to a joint statement, CloudMargin’s platform will be integrated into Deutsche Bank’s collateral infrastructure. The move is expected to save on costs and improve the client experience by creating…

Charles River and AcadiaSoft team up for margin call automation

January 11, 2019

News and Notes, News and Notes – Fintech

AcadiaSoft, automation, Charles River Development, Margin, State Street

Charles River Development, a State Street Company, and AcadiaSoft have announced a business alliance to automate communication of margin calls and collateral estimates between counterparties in the Charles River Investment…

ISDA white paper: Clearing Incentives, Systemic Risk and Margin Requirements for Non-cleared Derivatives

October 17, 2018

ISDA, Margin, non-cleared derivatives

Central clearing of standardized derivatives and margin requirements for non-cleared derivatives are two of the basic tenets of global financial regulatory reform. They are also inter-related: the purpose of margin…

Direct Clearing: A New Competitive Differentiator for the Buy-side

September 11, 2018

Frank Odendall

CCP, Collateral Management, Credit Exposure, Uncategorized

CCP, collateral, Direct Clearing, Eurex, Margin, topstory

The introduction of buy-side direct clearing for central counterparties (CCPs) has created buy-side opportunities while raising new considerations about business models, risk and reward. Whether and how to engage, for…

Big (alternative) data is better in real-time for alpha and risk

September 6, 2018

Big Data, Technology

Alpha generation, alternative data, Big Data, Goldman Sachs, Hanweck, intraday securities lending data, machine learning, Margin, Volmageddon, Voyant Capital Management

While there’s a lot of discussion about how to stop things like flash crashes, the fact is they are going to keep happening. Regulators are watching closely: ESMA just released…

Nasdaq leads team for margin and collateral on the blockchain

June 19, 2018

News and Notes, News and Notes – Fintech

ABN Amro Clearing Bank, blockchain, collateral, DLT, EuroCCP, Euroclear, Margin, Nasdaq

ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have completed a joint proof of concept to make the use of securities more efficient when used to cover margin calls, including after…

ISDA identifies gap in margin call issuance, proposes best practices for collateral STP

February 23, 2018

ISDA, Margin, STP

The ISDA Collateral Infrastructure Committee in its remit to monitor issues and challenges related to the OTC collateral process has identified a gap as it pertains to the current margin call…

ESMA consults on CCP anti-procyclicality margin measures

January 8, 2018

CCPs, EMIR, ESMA, Margin

The European Securities and Markets Authority (ESMA) has opened a public consultation on draft guidelines which aim to clarify the implementation of anti-procyclicality provisions for central counterparties (CCPs) under the…

What’s the real risk of CCPs, counterparty risk or liquidity risk?

August 7, 2017

CCP, Liquidity Management, Risk Management

CCP, default risk, liquidity risk, Margin, risk waterfall, topstory

A recently issued academic paper from Dr. Rama Cont at Imperial College London makes the argument that CCPs don’t mitigate counterparty credit risk, they just transform it into liquidity risk.…

Reuters: CLO market experiments with built-in margin reset to manage regulatory exposure

July 9, 2017

CLO, Margin, regulatory capital

Managers are considering embedding a new repricing feature in US Collateralized Loan Obligation (CLO) funds that would protect firms from regulation that requires them to hold 5% of their funds…

Tough challenges for prime brokers and MiFID II compliance

March 23, 2017

Richard Stinchfield

Europe, Prime Brokerage, Regulatory, Securities Lending

Europe, Margin, MiFID II, Prime Brokerage, Regulatory, topstory

This article looks at the questions of conflicts of interest and co-mingling of interests from the view point of the prime broker/borrower. This is a follow up to a previous…

Margin Optimization and the Cost of the Trade

February 9, 2017

CCP, Collateral Management, Derivatives, Technology

CCPs, collateral optimization, Margin, Margin optimization, OTC derivatives, technology, topstory

Banks have largely absorbed the Leverage Ratio and the Liquidity Coverage Ratio and are taking on the next challenge: maximizing their balance sheet efficiency in a return to profitability. One…

Australian regulators propose new securities lending, repo and margin data collection

January 19, 2017

Australia, data collection, FSB, Margin, Repo, Securities Lending

Economic and financial statistics, January 2017 Discussion Paper Proposed changes Repurchase agreements and securities lending Consistent with feedback received in informal consultation, the agencies are proposing two alternative versions of…

EBA and ESMA call for clarification of margin requirements between CRR and EMIR

January 19, 2017

CRR, EBA, EMIR, ESMA, Margin

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) published today their joint report on the functioning of the Capital Requirements Regulation (EU) No 575/2013 (CRR) with the…

An interview with Bimal Kadikar, CEO of Transcend Street Solutions

May 16, 2016

Big Data, Collateral Management, Derivatives, Liquidity Management, Operations, Technology

Big Data, Bimal Kadikar, collateral management, Liquidity, Margin, technology, topstory, Transcend Street

Transcend Street Solutions is establishing itself as an innovative player in the collateral and liquidity technology space. We spoke with CEO and founder Bimal Kadikar to learn more about what…

Finadium: Prime Brokerage: Towards a New Target Operating Model for Financing

May 27, 2015

CCP, Collateral Management, Prime Brokerage, Securities Lending

collateral, financing, hedge funds, Margin, Prime Brokerage, Securities Lending, topstory

This Finadium report looks at a newly emerging conversation in prime brokerage on the Target Operating Model for financing. We evaluate the historical prime brokerage financing model in relation to…

Prime brokerage 2014 revenues from physical financing and margin (Premium Content)

October 29, 2014

Prime Brokerage, Securities Lending

Delta One, Margin, physical financing, Prime Brokerage, Securities Lending, synthetic financing, topstory

We assess prime broker estimated revenues for 2014 from physical financing and margin. We build on the methodology for finding prime brokerage revenue first published in “Which prime brokers are…

What's the right margin for collateral in securities lending? 102%? 105%? 120%? (Finadium subscribers only)

November 14, 2013

CCP, Collateral Management, Securities Lending

collateral, Haircuts, Margin, overcollateralization, Securities Lending

Our market research is showing some movement in the last year, but also the last few months, in ideas about collateralization levels in securities lending. This article looks at some…

Finadium: Guide to Margining for Cleared Swaps vs. Futures

April 2, 2013

CCP, Collateral Management, Derivatives, OTC Derivatives Clearing

CCP, collateral, DCO, Finadium, futures, Margin, OTC derivatives, Swaps

Finadium has released a guide to understanding margin rules for cleared OTC swaps, non-cleared swaps, swap futures and standard futures. This guide is intended for market professionals needing a briefing…

Another shoe drops: Basel Committee and IOSCO issue consultation paper on margin for non-cleared derivatives

July 9, 2012

Basel III, Collateral Management, Derivatives, OTC Derivatives Clearing

Basel Committee, Basel III, BCBS, collateral management, IOSCO, Margin, non-cleared derivatives, OTC derivatives

Collateral Management, Liquidity Management, Repo, Securities Lending

In a long expected move, the Basel Committee on Banking Supervision and IOSCO have issued a joint consultation paper, “Margin requirements for non-centrally-cleared derivatives – consultative document.” The main idea…

"Margin Call", the movie is coming in October! Popcorn anyone?

September 9, 2011

Jonathan Cooper

Leverage, Margin, Securities Lending, Short selling