Cassini Systems, the leading provider of pre and post trade margin analytics, and a provider of a fully featured end-to-end SIMM Calculation Service, has today announced the launch of their AANA-Management Service.
This service provides relief to firms affected by BCBS/IOSCO’s change in the final phases of implementation of the Uncleared Margin Rules.
These changes add a new complexity with the addition of a 50bn AANA threshold, creating an opportunity for some firms to strategically manage their derivatives exposure and remain below the 50bn threshold.
Liam Huxley, CEO and Founder of Cassini, said of the announcement,“Clearly, the intent of the delay is to provide more time for smaller and medium size firms to prepare fully, especially in Europe where there is a requirement to perform back-testing”.
Considering the additional staggered implementation times based on in-scope firms’ AANA threshold, Cassini also offers an AANA Management Service which helps firms monitor their AANA, but also enables them to reduce their outstanding bilateral margin exposure.
These tools, available immediately, include:
1) The ability to calculate and monitor AANA exposure to determine in which phase your firm must begin posting initial margin under UMR.
2) Notional Reduction Tools to ensure you remain under the 50Bn or 8Bn threshold.
- Notional Compression
- Risk Replacement Optimization
- Strategic Clearing
3) SIMM Limit Monitor
Huxley continued: “With the AANA deferral, the temptation will be to simply put the UMR/SIMM project on hold for 12 months but that would be a mistake as there is a distinct opportunity to take advantage of this additional preparatory time. Rather than being forced to move quickly, firms can now take a more holistic, strategic approach to their collateral and margin management processes”.
Those firms with over 750 BN in AANA will still be required to begin posting Initial Margin from September 1st, 2019. Firms with 50BN-749 BN notional exposure will now begin posting in September 1st, 2020 and those with exposure between 8BN and 49BN will begin posting from Sept 2021. As before, firms with AANA under 8Bn are exempt.