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CloudMargin and SmartDX address EU, UK, US variation margin rules

First Published 27th February 2017

CloudMargin and SmartDX collaborate to help derivatives market participants meet new variation margin rules imposed this week.

Lee McCormack, CloudMargin

Lee McCormack, CloudMargin

London and New York - CloudMargin and SmartDX have partnered to address the Daily Variation Margin (VM) Rule that goes into effect March 1 in the European Union, United Kingdom, United States and elsewhere.

The offering enables buy-side investors and other over-the-counter (OTC) derivatives market participants to sign new ISDA Documentation or "repaper" their OTC agreements with existing or new counterparties through SmartDX, and then pass the operational data to CloudMargin's collateral management workflow tool to handle the increased volume of collateral transactions. CloudMargin estimates that, on average, the new VM rules will increase firms' collateral activity by 500 percent.

Lee McCormack, CloudMargin Head of Strategy and Product Development, said: "Despite the VM rule taking effect on Wednesday, only a small percentage of market participants have put in place a plan or the tools needed to post daily variation margin. But their operations workload and processes are about to change forever. The connectivity between CloudMargin and SmartDX provides buy-side firms and other swap market participants the ability to seamlessly and cost-effectively negotiate their agreements to become regulatory compliant, then on an ongoing basis, automate the process and easily manage the increased operational challenges."