Home - Margin Reform

Margin Reform helps clients operating in the financial sector to provide strategy, insight and delivery across derivatives, repo and securities lending for the margin, collateral and legal domains.

Our senior industry practitioners and transformative service model reduces the time to market on key revenue ideas, brings clarity to regulatory demands and competitive advantage to your most challenging problems.

All products exchange-traded, cleared and uncleared derivatives, repo and securities lending needs to be led by well-defined business objectives supported by efficient and cost-effective technology.

Risk and operational functions need industry connected systems to support straight-through processing and an environment where governance, controls and regulatory compliance are paramount and understood.

Margin Reform will bring clarity to your understanding of all aspects of collateral such as pricing, funding, liquidity, optimisation, operational capacity and risk.

Whether to support business P&L, cost drivers, regulations, or enhancing existing processes and requirements such as Clearing, Initial Margin, Reporting, Custody and Optimization are a necessity.

The complexity and far-reaching impact of G20 regulatory reforms (Clearing, UMR, SFTR, CSDR & IBOR) have led to a market understanding that data is critical and this requires improved negotiation techniques, smarter technology and increased digitisation.

Margin Reform is at the forefront of these solutions and can help you deliver the required technological and business process models.

months required to complete a UMR project

revenue opportunity p.a. for every €1bn of lent assets

of €20.6 trillion assets globally have been lent across asset classes*

*At Q3 2019 www.isla.co.uk

Number of data fields required for SFTR compliance

Number of firms expected to be impacted by SFTR

Number of new relationships subject to Phases 5 and 6 of UMR

Self disclosure
Client Engagement
Rule Distillation
Legal Agreements
Custodial onboarding
Technology
Operations
Optimisation
IM Model Governance

External Comms

Early engagement with clients, vendors and custodians
External Training

Market impact and outcomes with regulators requirements
Internal Comms

Central co-ordination to manage your group wide compliance delivery
Internal Training

Regulatory impact on role and BAU know-how for stakeholders

For firms impacted by UMR regulatory change needs to be solved over short period of time. This requires a fundamental re-design of your collateral management model to recalibrate, enhance and optimise your approach from the traditional credit mitigation role and springboard collateral as a key value driver for the firm.

Identify subjected products and trades, calculate your group AANA and formally self-disclose all impacted relationships to the industry.

Determine your trading partners, establish jurisdictional compliance and exchange responses for your bilateral margin requirements.

Complete an internal examination of the rules per jurisdiction, identify gaps, risks and create mitigation plans as part of self-attestation.

Negotiate and match eligible collateral schedules and utilise golden terms to drive processing.

Agree how to pledge Initial Margin through your custodian and onboard with your counterparty's agent. Negotiate, execute, test and configure internally and externally.

Determine the impact on collateral processing, settlement, reconciliations, connectivity to internal functions and the external collateral ECO system.

Operating model design and implementation to support new processes, increased volumes and the management of risk and compliance.

Understand the impact of collateral usage on your balance sheet, funding and liquidity metrics. Transform and mobilise collateral in support of P&L generation.

Determine the IM model and calculation approach. Develop, integrate and test all requirements including any backtesting, benchmarking, documentation, governance and validation.