Phil McCabe, Bloomberg
London - Bloomberg has announced that HSBC Private Bank, and more than a dozen corporations and financial institutions, have adopted Bloomberg's MARS Collateral Management and reconciliation solution to comply with new variation margin requirements for non-centrally cleared over-the-counter (OTC) derivatives.
Starting in March, participants in the $200 trillion (USD) market for non-centrally cleared OTC derivatives will need to adhere to stricter requirements imposed by global jurisdictions. These rules are intended to reduce systemic risk, but present costly operational challenges to investors who will need to calculate and post initial and variation margins for all non-cleared trades, classify eligible collateral to post and deal with an increase in margin calls and daily calculations.
Bloomberg MARS Collateral Management is part of a solution that helps banks, investment firms and corporations facilitate the collateral management and reconciliation process to adhere to these new requirements.
"The challenges investors face in the OTC derivatives market cannot be addressed with software alone,ˮ said Phil McCabe, Global Product Manager for Collateral Management at Bloomberg. "Bloomberg provides the data and analytics to calculate and reconcile margin requirements. We go further by connecting a global network of corporations and investment firms, both large and small, to unify what can be a very laborious, risky and disjointed process.ˮ