AcadiaSoft Inc., the industry provider of margin automation solutions worldwide, and Quaternion Risk Management Ltd., a risk analytics firm, have announced the formation of a partnership to provide risk services for firms subject to initial margining requirements for non-centrally-cleared derivatives.
The initiative couples AcadiaSoft’s proven capabilities in automation with Quaternion’s extensive quantitative expertise and will enable AcadiaSoft clients to access a range of services via the secure environment of the AcadiaSoft Hub.
Combining AcadiaSoft’s existing infrastructure with our risk analytics tools presents opportunities to create new products that will greatly benefit both the smaller players in the non-centrally-cleared market facing near-term hurdles, as well as larger, established institutions looking to reduce spend on functions that have become ‘business-as-usual’ and could now be more efficiently outsourced and standardized,” said Donal Gallagher, chief executive officer at Quaternion.
Initially, the partnership will focus on helping firms with non-centrally cleared derivatives portfolios meet the operational and regulatory challenges associated with margin requirements. On September 1, 2016, the largest banks that trade non-centrally cleared derivatives were required to post and collect initial margin (IM) due to a new margin framework established by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO), and each year since, and through 2020, those requirements touch a growing set of sell-side and buy-side firms.
We expect to be able to significantly cut the burden placed on market participants by the non-cleared margin rules and make achieving compliance a straightforward process – even for relatively small firms,” commented Fred Dassori, head of Risk Services and corporate development at AcadiaSoft. “After collaborating with the team at Quaternion on a range of projects over the past year, we’re excited to now be formalizing our partnership, and we’re looking forward to working together to greatly expand the set of tools we offer and give our clients a simple and efficient path forward.
By offering these future services through the same platform as AcadiaSoft’s existing Initial Margin Exposure Manager and MarginManager products, which sit at the heart of the current IM calculation, reconciliation, and collateral messaging processes, AcadiaSoft and Quaternion aim to make their new risk services as seamlessly-integrated into existing industry workflows as possible.