CloudMargin Launches Site to Navigate Uncleared Margin Rules

The site, called FlightPlan, will help firms identify and tailor information in order to plan for the coming rules through to 2020.

Kari Litzmann, chief marketing officer of CloudMargin, says FlightPlan is expected to simplify the process of getting information to meet upcoming margin rules.

“As CloudMargin is a cloud-based collateral management workflow tool and therefore fits naturally in the center of the collateral ecosystem, we wanted to use this opportunity to provide expertise across the entire collateral continuum to help firms experiencing challenges with the changes associated with collateralized products,” Litzmann says. “We hear questions about upcoming regulations and meeting operational challenges, so this site is a way for these firms to cut through the clutter.”

FlightPlan is free and open to the public. The site will be updated as some jurisdictions finalize margin rules over the next few years.

FlightPlan offers digital tools including a map that notes regulations in world markets, a readiness checklist, and a solutions comparison program. It also functions as a resource hub. Content in the microsite, including regulatory mapping and document generation, is provided by Derivatives Risk Solutions and SmartDX.

Litzmann says the regulation map allows clients to drill down on requirements based on entities, products, and variation margin and initial margin rules per geography. The readiness checklist, on the other hand, lets firms see if they are missing any conditions required for compliance. The comparison tool lets companies compare all avenues to solve operational challenges.

New uncleared margin rules have been implemented on a rolling basis since 2016, continuing until 2020. Some of the upcoming requirements include the end of a forbearance period on variation margins in multiple jurisdictions, a Jan. 8, 2018, deadline for physically settled foreign exchange (FX) forwards, and rollout of initial margin rules.

Uncleared margin rules have become a concern for financial institutions as they gear up for the coming years. One such concern is around derivatives not mandated for central clearing. Large buy-side firms and some banks are required by September 2018 to exchange initial margin on those derivatives.

With this in mind, other solution providers have also begun working on providing consulting services to buy-side firms and banks needing to change initial margins on some derivatives contracts. AcadiaSoft launched its Isda Simm Approval Guidance for its Expert Services consulting business. The service targets companies that will use the International Swaps and Derivatives Association’s (Isda’s) Swaps Initial Margin Model (Simm) to calculate margin requirements.