SmartStream launches solution for impending Uncleared Margin Rules (UMR) phase 6

Rick Steves

The solution covers cleared and non-cleared, OTC derivatives margining, repo margining and securities lending margining.

SmartStream Technologies has launched a faster and more efficient way to get eligibility information contained within collateral agreements like CSA, GMRAs and OSLA’s*, for both pre- and post-trade collateral optimisation.

Going by the name of Eligibility API for Collateral Management Optimisation, the solution addresses the impending UMR (Uncleared Margin Rules) phase 6 regulatory regime being implemented in September 2022.

Volumes of margin calls are expected to increase and there will be an inevitable squeeze on assets being pledged as collateral, resulting in a rise in demand for High Quality Liquid Assets (HQLA).

SmartStream added that interest rates forecast to rise, which drives firms to look at pre- and post-trade optimisation so as to efficiently use scarce HQLA and Cash. The solution helps firms to publish eligible collateral for each legal agreement, which can then be consumed by their optimisation engines.

UMR deadline is fast approaching

Jason Ang, Program Manager, Collateral Management at SmartStream, commented: “We realise the UMR deadline is fast approaching, and we have made it easy for clients to deploy our new solution, and to manage future versions without the need for lengthy implementation projects. Furthermore, having a public API strategy, lowers the cost-of-ownership of the collateral solution. The demand for this new API is high and we are having conversations with the major banks on how they can use our eligibility to optimise their collateral in preparation for the future”.

A critical feature of the solution is that it quickly and easily provides access to eligibility schedules from OTC and repo collateral systems. The new API allows fast and easy access to collateral and the sourcing of eligibility information in real-time.

SmartStream’s TLM Collateral Management is an automated data management solution that helps financial institutions lower the operational risks associated with collateral management programmes.

The solution covers cleared and non-cleared, OTC derivatives margining, repo margining and securities lending margining.

SmartStream’s Reference Data Utility (RDU) live on Cboe Europe

Late last year, SmartStream’s financial Reference Data Utility (RDU) went live with Cboe Europe, a new Amsterdam-based futures and options exchange, to allow users to mutualise the processes needed to manage the exchange’s data.

In addition to the 105 Market Identifier Codes (MICs) currently supported by SmartStream RDU, it will act as a processing agent, managing the complete data lifecycle – sourcing, validation, enrichment, cross-referencing, and critically applying cleansing best practices to deliver the highest quality data, in the formats required, the firm stated.

SmartStream has recently launched an Exchange Notification Service (ENS) as part of its SmartStream RDU solution suite and developed in partnership with clients.

Designed to track, consolidate and normalize reference data notifications published by each exchange, the ENS service addresses the mammoth task of managing all subscriptions from more than 100 exchanges where derivatives are traded.

In conjunction with several clients, SmartStream realized that missing exchange notifications – due to multiple exchanges and formats – in the reference data space can be very costly.

SmartStream claims its Reference Data Utility (RDU) is the only service provider to produce a consolidated list of normalized notifications. ENS will be added to the suite so that firms no longer need to incur the operational overheads of manually monitoring these notices.

The service published intraday notifications immediately as they help drive quality improvements across functional areas, such as trading, risk mitigation, validating vendor notifications for corporate actions, and feed changes.

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