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End-to-End Initial Margin Services

MARGIN TONIC -

END-TO-END INITIAL MARGIN SERVICES

MARGIN TONIC PROVIDES INDUSTRY-LEADING,

END-TO-END INITIAL MARGIN SERVICES.

THE PROBLEM

The Initial Margin (IM) rules, unlike the Variation Margin rules, have triggered unprecedented front-to-back IT and operational change for in-scope firms. As a result, a new and still-evolving industry operating model for Uncleared derivatives has been created.

The huge volume of new Phase 5 groups complicates the delivery further, based on the industry queues that will form at Vendors, Custodians and Legal teams alike (see our related post here for our impact summary of BCBS/IOSCO’s March-19 guidance).

Limited resources and IM expertise typically available at the Phase 5 firms, combined with a tight time window and the huge jump in counterparty scope, makes compliance a significant challenge for many in-scope firms

 
AANA threshold and in-scope group estimates by phase

AANA threshold and in-scope group estimates by phase

 

OUR INITIAL MARGIN EXPERTISE

Margin Tonic has already defined and delivered the Initial Margin changes to multiple firms across different phases, including Tier 1 Dealers, smaller banks and buy-side firms.

We are considered the industry leaders for Initial Margin compliance

We break down the IM changes into four workstreams: Calculations, Operations, Custodians and Legal.

Our specialists have expertise across all four workstreams which, combined with hands-on lessons learnt from previous phases, allows us to provide an Initial Margin one-stop-shop for our Clients.

 
Margin Tonic’s IM expertise

Margin Tonic’s IM expertise

 

OUR END-TO-END SERVICES

At Margin Tonic we provide end-to-end Initial Margin services via a flexible set of advisory, analysis and delivery proposals.

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Depending on the needs of our Clients, we normally break down our Initial Margin services into four key stages:

  1. Threshold Breach Assessment - Our Threshold Breach Assessment (TBA) service is a powerful planning tool which gives our Clients a single, upfront view of which IM relationships will breach the $/€50mill exchange threshold and by when. The TBA has forecast SIMM & Schedule calculations and optimal threshold allocation at its core - for more details click here. We can also cover scope analysis and AANA calculations, if required.

  2. Strategy & Planning - Once firms understand their IM scope and forecast numbers, we can move onto strategy, target operating models, planning and key decisions such as SIMM solutions and Custodian selection.

  3. Definition - The Definition stage covers detailed requirements, solution design and process flows across all change workstreams.

  4. Delivery - Delivery captures the final group of upfront activities for compliance, including solution and Vendor deliveries, Custodian onboarding, testing, Regulator submissions, Legal negotiations and operational readiness.

Tonic BENEFITS 

Our combination of expertise, plus our extensive network of industry partners, ensures that our Clients experience three key benefits when using Margin Tonic’s IM services:

  • Compliance protection

  • Accelerated delivery

  • High-quality execution

CONTACT US

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