Fully hosted service supports ISDA Standard Initial Margin Model (SIMM) and integrated collateral management ecosystem
NEW YORK (September 27, 2018) – IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today announced the launch of its Initial Margin Calculation Service with broad coverage for non-cleared derivatives across interest rates, equities, FX, credit and commodities.
A complex, five-phase international framework for posting initial margin began in 2016, and ISDA estimates more than 9,000 trading relationships and 1,000 counterparties will come into scope during the final phase of implementation in 2020. As this milestone approaches, asset managers face significant challenges in building or sourcing the data, risk sensitivity models and other tools required to calculate and manage initial margin.
The Initial Margin Calculation Service delivers risk sensitivity and margin calculations using robust models for valuing OTC derivatives and high quality, independent market data from IHS Markit and its award winning Portfolio Valuations service. It incorporates ISDA’s SIMM™ methodology and the industry-standard Common Risk Interchange Format (CRIF) file.
“The Initial Margin Calculation Service provides financial institutions a flexible solution powered by best-in-class derivatives valuations data and an infrastructure that breeds operational efficiency,” said Nosheen Amir-Ebrahimi, managing director and co-head, Derivatives Data and Valuation Services at IHS Markit. “Most importantly, we now offer our customers an integrated end-to-end collateral management ecosystem which automates and streamlines the entire margin lifecycle, ensuring consistency across initial and variation margin calculations.”
IHS Markit offers a complete solution set for the efficient management of margin. These services cover documentation and the negotiation of margin terms, calculation services and a platform for managing margin through the trade lifecycle. Components include:
- Counterparty Manager – Centralized documentation management service that automates the creation and amendment of variation margin agreements (including the standard Credit Support Annex under ISDA VM Protocol)
- Margin Xchange™ – Built in partnership with Allen & Overy and SmartDX, the solution automates the creation, negotiation and repapering of all types of derivative contracts for Initial Margin (with API data transfer to collateral systems
- Portfolio Valuations – Best-in-class service for mark-to-market positions on vanilla and complex derivatives and variation margin calculations
- Collateral Manager – Straight-through processing solution for collateral management based on CloudMargin technology (all cleared and non-cleared OTC derivatives, repos, stock loans, futures and options, TBA transactions)
The ecosystem can be enriched with additional intelligence from IHS Markit, including collateral pricing and reference data, and information on corporate actions, repos, securities lending and counterparty valuations.