Phase 6 of Uncleared Margin Rules is set to take effect within days, and we hosted an "SS&C Middle Office Series - UMR" podcast in which we discussed ways to confirm your readiness for compliance. The fast-approaching deadline doesn’t mean you can soon stop thinking about the changes, and it doesn’t mean you’re too late to take actions that will help your firm make the best decisions.
The sheer number of entities that will be brought into scope with this latest phase will include those whose core competence is not OTC derivatives, and who will want to ensure they’re complying in the most efficient way possible.
In that same vein, some entities may choose to monitor initial margin requirements closely to ensure they remain below the $50 million threshold that would require their firm to post collateral. There are a few strategies for remaining below the threshold. One option is to move qualifying trades to clearinghouses, compress trades, or add more counterparties.
There are also many nuances to custodians, so choose a custodian within the same region of the governing law of your CSA. For international business, choose a custodian that can handle any region. It’s also important that the custodian can accept the eligible collateral that falls under your CSA. This may require new negotiations with your counterparties to determine what is accepted eligible collateral.
For the full discussion, including how to determine if you’re in scope and what the differences in requirements are, listen to our ""SS&C Middle Office Series - UMR" podcast. Or, read our "Uncleared Margin Rules Phase 6 is Coming: Are You Ready?" blog about calculating Average Aggregate Notional Amounts (AANA) and the different jurisdictions. To find out how SS&C can help you stay compliant, download our "UMR Phase 6" brochure.
Alternative Investments, APAC, EMEA, Fund Administration