All 24 global banks subject to the new over-the-counter (OTC) derivatives margining regulations, which came into effect on 1 September, are now using the AcadiaSoft Hub.
The Hub is the first-ever central margining service for non-cleared OTC derivatives. It automates the end-to-end margining process between participants by calculating margin, reconciling exposures and sensitivities, and agreeing margin on a central, standards-based platform.
Volumes are growing quickly – more than 2 million sensitivities and 150,000 trades were seen on a daily basis within the first two weeks of the new regulations.
Aggregate volumes seen between 9-15 September were 750 live agreements, 11.5 million sensitivities and 3,300 regulatory calls (IM and VM combined).
"The Hub is truly an industry game-changer," says Chris Walsh, chief executive officer of AcadiaSoft. "The volume growth we've seen in just a few weeks is a clear indicator that the operational model is working and we are fully prepared to support additional jurisdictions and phases of the new rules."
The AcadiaSoft Hub was launched in February 2016, seven months ahead of the deadline, to enable banks to test the system and allow for a smooth and swift transition on 1 September.
Industry participants can now automate and scale their margin processes through the Hub to comply with the new margin framework established by the Basel Committee on Banking Supervision (BCBS) and the International Organisation of Securities Commissions (IOSCO) and legislated by local prudential regulators around the globe.
"We are continuing to improve and build upon the success of the Hub," says Mark Demo (pictured), regulatory product director at AcadiaSoft. "In the future, we plan to expand our model to address the entire post-trade risk lifecycle in the OTC, cleared, repos, TBA and loan markets."
In March 2017, more than 2,000 additional organisations will be required to comply with the new regulations, including hundreds of additional banks and the larger asset management firms. When fully implemented over the next five years, the regulations will result in a substantial increase in margin calls and associated collateral movements that will require an entirely automated margin process.
