AcadiaSoft Inc, a provider of risk and collateral management services for the non-cleared derivatives community, is collaborating with Capitalab, a division of BGC Brokers, for the provision of their initial margin (IM) optimisation service.
The service is designed to allow clients calculating IM to optimise exposures to result in lower margin payments and to reduce capital funding requirements.
“Optimisation services meet an important need for the derivatives market, as firms posting IM seek to reduce costs,” says Fred Dassori (pictured), head of strategic development at AcadiaSoft, “and the relationship with Capitalab allows us to provide even more options via the AcadiaSoft Hub. We are pleased to work with industry leaders like Capitalab to make the Hub a one-stop shop for our clients’ initial margin requirements.”
The Capitalab IM optimisation service runs on a routine basis for Rates and now FX asset classes, and is scalable to meet increasing numbers of products and participants. Respecting constraints applied to the optimisation algorithm, each run optimises bilateral risk exposures post-execution. Clients can set their optimisation constraints, accommodating variables such as counterparty risk, market risk and CSA terms, with the service facilitating straight through processing.
“This collaboration with AcadiaSoft is an important milestone as we continue to expand Capitalab’s derivatives services,” says Capitalab’s London-based co-founder Gavin Jackson. “By leveraging the risk data within the AcadiaSoft Hub, Capitalab services are easily available to clients in-scope for the initial margin requirement, and our existing clients can improve operational efficiency and reduce the costs associated with maintaining derivatives portfolios.”
The AcadiaSoft Hub’s integration with IM optimisation and compression services reduces regulatory and operational risks by providing automation through AcadiaSoft’s secure platform. AcadiaSoft stores portfolio data behind the AcadiaSoft firewall and, by restricting the transfer of data based on the participants and requirements of each individual service, AcadiaSoft removes opportunities for exposing sensitive client data.
