AcadiaSoft, a provider of margin automation solutions for counterparties engaged in collateral management worldwide, has launched Agreement Manager, which will create an industry-wide, 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 standardise 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," says Richard Barton (pictured), product manager for AcadiaSoft Agreement Manager. "One, it took too long to negotiate new legal agreements between firms, and two, once the agreements were finalised, it took too long to implement them operationally. By storing data in the Hub and sharing it in a standardised manner, AcadiaSoft will support client optionality, vendor choice and market-wide adoption of automated solutions."
AcadiaSoft already maintains over 50 per cent of all industry-wide active VM Credit Support Agreements (CSAs) and nearly 100 per cent 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 optimisation, 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 JP Morgan and Goldman Sachs, among others.
"Standards and interoperability are critical for the industry to adopt and maximise benefit from all service providers," says Natalie Clareburt, Executive Director in the Strategic Market Infrastructure Group at JP Morgan. "It is great to see so much industry focus and innovation in contract digitisation 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.
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