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End-to-End Initial Margin Services






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.

Recent Regulatory guidance has split the original Phase 5 big-bang into two tidal waves (see our related posts here on the impact of Phase 5 and 6 and the $50mn exchange threshold relief).

Based on ISDA’s estimates, there will be over 300 new Phase 5 firms and around 800 Phase 6 firms. The huge volume of new Phase 5 and 6 groups complicates the delivery further, based on the industry queues that will form at Vendors, Custodians and Legal teams alike.

To achieve compliance by 1st September, it will be absolutely critical for firms to beat those industry queues.

Phase 5 and 6 firms caught by the IM rules can also be constrained by limited resources and parallel Regulatory deliveries (remember that IBOR transition and IM Phase 6 now meet head-on at the end of 2021....). 

Group volume estimates by IM Phase

Group volume estimates by IM Phase



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 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


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

Margin Tonic’s end-to-end IM services

Margin Tonic’s end-to-end IM services


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

  1. AANA Calculations - Advisory services to guide firms through their AANA calculations, both upfront and ongoing, and any pro-active action to reduce their AANA results going forwards. Click here for our AANA calculation guide.

  2. 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.

  3. 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.

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

  5. 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.


We also continue to offer our free Initial Margin Health checks, which can be used by new IM firms to kickstart their IM programme and help them understand the key IM changes, challenges and solutions.

Then in parallel to all of our consultancy services, we now provide IM Accelerator packs to in-scope firms. Our packs contain a series of ready-made, high-value accelerators that significantly quicken key compliance activities and timeframes, giving firms the best chance to ‘beat the industry queues’ for Phases 5 & 6.


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