New Hub Service will provide industry standard for sharing of “golden source” trade and collateral data
AcadiaSoft, Inc., the leading industry provider of margin automation solutions for counterparties engaged in collateral management worldwide, announced a new initiative, Agreement Manager, which will create an industry-wide, authoritative data store of legal and operational collateral agreement information for OTC Derivatives.
A new AcadiaSoft Hub service, Agreement Manager, will match, store and exchange new and existing ISDA Variation Margin (VM) and Initial Margin (IM) details as well as the Account Control Agreements between trading parties and custodians. Agreement Manager will also standardize the legal agreement data shared between parties, in order to reduce integration points and ensure inter-operability of trading partners, custodians, document management providers and on-line negotiating vendors.
“The VM big bang go-live last March exposed two key industry weaknesses,” said Richard Barton, product manager for AcadiaSoft Agreement Manager. “One, it took too long to negotiate new legal agreements between firms, and two, once the agreements were finalized, it took too long to implement them operationally. By storing data in the Hub and sharing it in a standardized manner, AcadiaSoft will support client optionality, vendor choice and market-wide adoption of automated solutions.”
AcadiaSoft already maintains over 50% of all industry-wide active VM Credit Support Agreements (CSAs) and nearly 100% of all industry IM CSAs on its MarginSphere platform. Creating a golden source copy of the agreement data and facilitating the transfer of the data via a standard model has the potential to create a frictionless on-boarding process and improve the quality of information available for collateral optimization, risk and collateral management, as well as trade valuation and novation services.
A pilot of AcadiaSoft Agreement Manager will begin later this month. Participants will include buy-side firms, custodians and a number of global derivatives banks including J.P. Morgan and Goldman Sachs, among others.
“Standards and interoperability are critical for the industry to adopt and maximize benefit from all service providers,” said Natalie Clareburt, Executive Director in the Strategic Market Infrastructure Group at J.P. Morgan. “It is great to see so much industry focus and innovation in contract digitization and negotiation and we are excited to participate in the pilot.”
Agreement Manager continues AcadiaSoft’s Hub approach to providing interoperable automated solutions for the industry while enabling flexibility and choice. Going forward, Agreement Manager will also support Repos, Master Securities Forward Transaction Agreements (MSFTA), Securities Lending, Clearing and other agreement types.
