Finastra and CloudMargin Collateral Management as a Service offering accelerates compliance with UMR regulation

Finastra today announced that its Collateral Management as a Service app – powered by CloudMargin and available through Finastra’s FusionFabric.cloud platform ­– now incorporates new capabilities to help financial institutions meet the requirements for Uncleared Margin Rules (UMR).

It’s estimated that the new Phase 6 of UMR, due to come into effect in September 2022, will affect 1,000 additional entities for the first time. For firms not familiar with posting initial margin, getting ready for UMR can be a significant, time-intensive process. The partnership between Finastra and CloudMargin will make it easy for Finastra customers using solutions such as Fusion Kondor, Fusion Opics and Fusion Summit to submit the data needed to comply.

Akber Jaffer, EVP, Treasury and Capital Markets Business Unit at Finastra said, “As the deadline for UMR approaches, the need for new and complex calculation methods for initial margin calculation is more important than ever. Together with CloudMargin, we’re offering our customers a solution that is cost efficient and quick to adopt. Delivering collateral management as a service, rather than deploying on-premise software, dramatically reduces the cost of ownership for users and delivers fast results.”

The Software-as-a-Service (SaaS)-based CloudMargin solution is provided with integration to certified ISDA standard initial margin model (SIMM) partners, as well as grid-based methodology support. As well as margin call calculations, it handles counterparty messaging, dispute management, substitutions, settlement and interest payments, and it optimizes bank security inventory for collateral pledges.

Stuart Connolly, CEO of CloudMargin, said, “Now is the time for Phase 6 firms, that will be subject to UMR for initial margin calls, to start addressing operational and technological challenges ahead of the deadline. Our partnership with Finastra makes it easy for firms using Finastra’s core treasury and capital markets solutions to submit their data to CloudMargin and quickly comply with the new requirements.”

By facilitating the end-to-end straight-through processing of derivatives transactions, and all associated collateral management workflows, it’s estimated that the use of CloudMargin through Finastra’s FusionFabric.cloud platform can result in savings of up to 70% in total cost of ownership in comparison to an on-premise solution.