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Mitigate

We provide business solutions and the professional training to incorporate them.

Our Offerings

We possess the skills and resources to empower your success. Margin Reform is designed to provide results that quickly meet clients' needs in a flexible and expandable manner.

Margin Reform is designed to address your needs, whether at the beginning of design, improving current practices or procedures, developing internal skills and expertise, or providing the knowledge and experience to achieve your goals. We do this through a flexible, client-centric, and scalable approach.

Offerings

It's the things we do really well

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CLEARING, MARGIN AND COLLATERAL

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We are experts in the strategic design, development and implementation of clearing, margin and collateral architecture. From the design and development of best in class target operating models and collateral management frameworks. We use industry best practices, new technological innovations and vendor selection to support your front to back capabilities. Whether it’s in response to regulatory demands, or to future proof your operating environment and create efficiencies through programme and project management supported by business and IT analysis.

MARKETS AND TRADING

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As the collateral puzzle becomes increasingly complex as a result of the interrelated nature of derivatives, securities lending and repo, we offer the expertise and solutions to deliver on your intended direction. Including feasibility studies and business case development to assess whether enhanced inventory management can create alpha-generating business opportunities, reduce funding costs through improved optimisation algorithms leading to a more efficient and dynamic liquidity management operation. We can improve your analytical capabilities to identify and manage the direct and indirect costs associated with your P&L.

RISK AND REGULATION

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The regulatory landscape for cleared and non-cleared derivatives (UMR), the Securities Financing Transaction Regulation (SFTR), the Central Securities Depositories Regulation (CSDR) and the Interbank Offer Rate (IBOR) transition brings significant challenges to our industry. We provide our clients with bespoke solutions to address their risk and regulatory challenges, whether complex regulatory developments such as the Standardised Initial Margin Methodology (SIMM) or the distillation and interpretation of regulations to help define the business impact, we can help formulate and establish plans and a vision before guiding you through to execution.

LEGAL AND DOCUMENTATION

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The volume of legal documentation now required to support trading, reporting, custody, netting and regulations has made requirements more complex and challenging to maintain. Future-proofing legal data as a digitised golden source of the truth has never been more critical. We provide consultancy services directly and through partnerships on all aspects of legal requirements including netting opinions, technology options for digitisation and outsourcing options for negotiation of conditions to support UMR, IBOR, repo, securities lending and custodial and outsourcing arrangements.

ASSURANCE AND ADVISORY

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Today's trading and post-trade environments are subject to far-reaching and rigorous governance and regulatory requirements that impact on business models and commercial objectives. We design and deliver independent services to validate and ensure compliance with existing processes, procedures and regulations. We can review external engagements in the post-trade environment to ensure that your service requirements and standards are being met and provide training programmes across all aspects of the collateral chain.

MARGIN ADMINISTRATION

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Clients need to operate in an efficient, controlled and robust environment to stay regulatory compliant and to contain the pressures on headcount, technology and costs as they strive to satisfy all internal and client demands. Inefficient operating models face new demanding requirements, associated costs and changing market dynamics may not be sustainable. We can provide clients with the analysis and expertise to choose the right margin administrator or service providers, that will help to simplify the challenges, improve the cost environment and provide a far quicker time to market which utilises the collateral ecosystem.

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"UMR Wheel of Pain"

The "Wheel of Pain" highlights the key steps, risks, issues and pitfalls which need addressing

1. Self Disclosure

Officially communicate reg status and complete AANA calculation. Determine margining approach to VM / IM (threshold monitoring)

2. Client Engagement

Use the self-disclosure process to define the scope of clients to engage. Consider clearing, novations, compressions or ETD trading and margining.

3. Rule Distillation

Interpretation of rules and challenges. Best practice requires a line-by-line self-attestation with gap analysis, mitigation plans and risk procedures in place.

4. Legal Agreements

Negotiate bilateral documentation and match eligible collateral schedules, avoid basis risk and utilise clean golden sourced data.

5. Custodial Onboarding

Third-Party Custodian or Tri-Party Agent account set-up allocation. Onboarding includes KYC, AML, and meeting industry deadlines. Complete testing IM movements before going live.

6. Technology

Do you have the right technology solutions (cloud vs old tech)? Are you connected to the collaborative ecosystem of vendors, utilities, exchanges, CCPs and custodians?

7. Operations

Increased margin calls, T+1 settlements. Dispute management & new escalations to risk teams. New target operating models. Collateral settlement and dispute resolution, operational risk management & daily KPIs and KRIs.

8. Optimisation

Long boxes, collateral drag, cash or non- cash, CTD/BTR selection, transformation, mobilisation, upgrade/downgrade, widening of schedules for new collateral types (Equities / MMFs / UCITS etc.)

9. IM Model Ownership

Initial Margin models (ISDA SIMM vs Schedule), dealer calcs, model governance / development & escalation documentation, testing, validations, approvals, audits, backtesting, benchmarking, new product approvals.