IHS Markit, a specialist in critical information, analytics and solutions, has launched its Initial Margin Calculation Service with broad coverage for non-cleared derivatives across interest rates, equities, FX, credit and commodities.
A complex, five-phase international framework for posting initial margin began in 2016, and ISDA estimates more than 9,000 trading relationships and 1,000 counterparties will come into scope during the final phase of implementation in 2020. As this milestone approaches, asset managers face significant challenges in building or sourcing the data, risk sensitivity models and other tools required to calculate and manage initial margin.
The Initial Margin Calculation Service delivers risk sensitivity and margin calculations using robust models for valuing OTC derivatives and high quality, independent market data from IHS Markit and its award winning Portfolio Valuations service. It incorporates ISDA’s SIMM methodology and the industry-standard Common Risk Interchange Format (CRIF) file.
“The Initial Margin Calculation Service provides financial institutions a flexible solution powered by best-in-class derivatives valuations data and an infrastructure that breeds operational efficiency,” says Nosheen Amir-Ebrahimi (pictured), managing director and co-head, Derivatives Data and Valuation Services at IHS Markit. “Most importantly, we now offer our customers an integrated end-to-end collateral management ecosystem which automates and streamlines the entire margin lifecycle, ensuring consistency across initial and variation margin calculations.”