TIMELINE

This template timeline demonstrates the milestones along the road towards UMR compliance. AcadiaSoft supports clients throughout their journey, with a suite of effective applications powered by the AcadiaSoft Hub and tailored guidance from our expert Advisory Services team.

Phase 4 Go-Live - September 2019

Click Here For Phase 5

Identification of In-scope

All financial services firms will need to perform a complete analysis of their aggregate average notional amount (AANA) of non-cleared derivatives at the consolidated corporate group level. The results of this analysis will then need to be compared against the set levels defined by the Uncleared Margin Rules, to determine whether the firm lies in-scope for Phase 4 (deadline September 2019) or Phase 5 (deadline September 2020) of the incoming regulation.

AcadiaSoft Services

Advisory Service

AcadiaSoft’s Advisory Service can oversee and review the AANA calculation process and suggest improvements as required, based on our unrivalled experience gained from supporting all in-scope firms across Phases 1, 2 & 3, as well as the specific requirements of each organisation.

Counterparty Disclosure

Early disclosure is highly recommended to allow each firm to determine the impacted number of counterparty relationships. Internal leads across the Business, Legal, Documentation and Operations functions will need to be established, and serve as the firm’s key representative – this list should also be shared with ISDA & AcadiaSoft. Industry working groups hosted by ISDA & AcadiaSoft provide unique opportunities for these representatives to learn, share and collaborate towards the smoothest possible industry-wide adoption of Phase 4 UMR.

AcadiaSoft Services

Advisory Service

AcadiaSoft's Advisory Service is available to help with the client/counterparty outreach process, and coordinate the collection of all relevant information.

Defining Approach

Important decisions need to be made about how organisations will comply with the IM requirements. Firms will need to agree on custodians for posting IM, agree on thresholds and MTA with counterparties, agree on eligible collateral and define minimum internal standards for collateral schedule, decide on usage of Schedule or SIMM™ for IM methodology, and define an internal client priority for go-live efforts. If you decide to use the SIMM™ model, apply to ISDA for your license.

AcadiaSoft Services

Advisory Service

AcadiaSoft’s Advisory Service can: help firms evaluate collateral options based on their overall funding, credit and liquidity objectives; support evaluation of Schedule/SIMM methodologies; and review / optimise client prioritisation.

Sensitivities Calculation

AcadiaSoft’s Sensitivities Calculation Service fully automates the initial margin process: calculating sensitivities and seamlessly generating the Common Risk Interchange Format (CRIF) file that forms the input to the SIMM™ calculation.

Initial Margin Exposure Manager

AcadiaSoft's Initial Margin Exposure Manager (IMEM) provides end-to-end IM reconciliation and calculation, helping bring firms into compliance with the new regulatory requirement to collect and post IM held in a segregated account.

Obtain Regulatory Model Approval

Regulatory approval is required for firms seeking to use SIMM™ as part of their UMR compliance – wherever applicable, firms will need to prepare the appropriate documentation and processes. This will require a combination of in-house and external resources to support the regulatory approval process, the model governance and validation process, and the drafting of all necessary policies and procedures.

AcadiaSoft Services

Advisory Service

AcadiaSoft's Advisory Service is available to provide all information, guidance and analysis to establish model validation, as well as a governance process to secure regulatory approvals.

Custodian Set-up

Following on from the ‘Defining Approach’ step above and agreeing Custodians for posting IM, firms will need to establish bilateral connectivity to the selected institutions. With procedural and infrastructural implications, firms will need to complete all the necessary KYC checks required by each Custodian, establish segregation account(s), and test all connections to ensure resilience and effectiveness.

AcadiaSoft Services

AcadiaSoft Working Groups

AcadiaSoft's Working Groups provide a unique forum for firms as they complete the Custodian Set-up and on-boarding processes – enabling community members to benefit from the industry's collective experience and 'lessons-learned' to streamline and maximise the efficiency of this process – which may stretch resources depending on the number of Custodians being connected to.

Calculation & Operational Set-up

Building on the planning and preparation completed thus far, firms will need to develop or outsource the infrastructure required to compute margin under UMR and operationally support the daily margining process. From preparing the regulatory IM calculator, integrating / preparing to integrate with best-practice industry platforms including AcadiaSoft’s IM Exposure Manager and ISDA’s Crowdsourcing Utility, developing backtesting / benchmarking routines on annual & quarterly basis along with internal monitoring, and then developing the necessary operational capabilities.

AcadiaSoft Services

Advisory Services

AcadiaSoft’s Advisory Service supports firms as they transition from planning to execution – sharing the benefit of experience gathers across Phases 1, 2 & 3 with the world’s largest financial institutions.

Sensitivities Calculation

AcadiaSoft’s Sensitivities Calculation Service fully automates the initial margin process: calculating sensitivities and seamlessly generating the Common Risk Interchange Format (CRIF) file that forms the input to the SIMM™ calculation.

Initial Margin Exposure Manager

AcadiaSoft's Initial Margin Exposure Manager (IMEM) provides end-to-end IM reconciliation and calculation, helping bring firms into compliance with the new regulatory requirement to collect and post IM held in a segregated account.

Benchmarking & Backtesting

AcadiaSoft offers an ISDA SIMM™ Backtesting & Benchmarking Service that includes both backtesting of SIMM™ over a historical period and benchmarking SIMM™ against three industry-standard risk methodologies to assist in monitoring the effectiveness of SIMM™ as a margin model.

Negotiate/Execute Documentation & Go-live Testing

Bilateral Initial Margin CSA or collateral transfer agreement / security agreements, for each counterparty pair, will need to be in place before the Phase 4 go-live date – and tested on executions of bilateral IM CSA as well as trilateral with custodian account. Ensuring that all necessary relationships are live and ready for activation, ideally three months out from Phase 4 go-live, provides peace of mind and regulatory reassurance that all obligations have been met.

AcadiaSoft Services

Advisory Services

AcadiaSoft's Advisory Service support clients by overseeing the complete testing routine, to ensure that any gaps are identified and corrected.

AgreementManager

AgreementManager - an AcadiaSoft HUB application - establishes an authoritative source of Collateral agreements through common standards and a unified workflow. AgreementManager enables comparison, validation and affirmation of existing agreement data via a single interface.

Phase 5 Go-Live - September 2020

Click Here For Phase 4

Identification of In-scope

All financial services firms will need to perform a complete analysis of their aggregate average notional amount (AANA) of non-cleared derivatives at the consolidated corporate group level. The results of this analysis will then need to be compared against the set levels defined by the Uncleared Margin Rules, to determine whether the firm lies in-scope for Phase 4 (deadline September 2019) or Phase 5 (deadline September 2020) of the incoming regulation.

AcadiaSoft Services

Advisory Service

AcadiaSoft’s Advisory Service can oversee and review the AANA calculation process and suggest improvements as required, based on our unrivalled experience gained from supporting all in-scope firms across Phases 1, 2 & 3, as well as the specific requirements of each organisation.

Counterparty Disclosure

Early disclosure is highly recommended to allow each firm to determine the impacted number of counterparty relationships. Internal leads across the Business, Legal, Documentation and Operations functions will need to be established, and serve as the firm’s key representative – this list should also be shared with ISDA & AcadiaSoft. Industry working groups hosted by ISDA & AcadiaSoft provide unique opportunities for these representatives to learn, share and collaborate towards the smoothest possible industry-wide adoption of Phase 4 UMR.

AcadiaSoft Services

Advisory Service

AcadiaSoft's Advisory Service is available to help with the client/counterparty outreach process, and coordinate the collection of all relevant information.

Defining Approach

Important decisions need to be made about how organisations will comply with the IM requirements. Firms will need to agree on custodians for posting IM, agree on thresholds and MTA with counterparties, agree on eligible collateral and define minimum internal standards for collateral schedule, decide on usage of Schedule or SIMM™ for IM methodology, and define an internal client priority for go-live efforts. If you decide to use the SIMM™ model, apply to ISDA for your license.

AcadiaSoft Services

Advisory Service

AcadiaSoft’s Advisory Service can: help firms evaluate collateral options based on their overall funding, credit and liquidity objectives; support evaluation of Schedule/SIMM methodologies; and review / optimise client prioritisation.

Sensitivities Calculation

AcadiaSoft’s Sensitivities Calculation Service fully automates the initial margin process: calculating sensitivities and seamlessly generating the Common Risk Interchange Format (CRIF) file that forms the input to the SIMM™ calculation.

Initial Margin Exposure Manager

AcadiaSoft's Initial Margin Exposure Manager (IMEM) provides end-to-end IM reconciliation and calculation, helping bring firms into compliance with the new regulatory requirement to collect and post IM held in a segregated account.

Obtain Regulatory Model Approval

Regulatory approval is required for firms seeking to use SIMM™ as part of their UMR compliance – wherever applicable, firms will need to prepare the appropriate documentation and processes. This will require a combination of in-house and external resources to support the regulatory approval process, the model governance and validation process, and the drafting of all necessary policies and procedures.

AcadiaSoft Services

Advisory Service

AcadiaSoft's Advisory Service is available to provide all information, guidance and analysis to establish model validation, as well as a governance process to secure regulatory approvals.

Custodian Set-up

Following on from the ‘Defining Approach’ step above and agreeing Custodians for posting IM, firms will need to establish bilateral connectivity to the selected institutions. With procedural and infrastructural implications, firms will need to complete all the necessary KYC checks required by each Custodian, establish segregation account(s), and test all connections to ensure resilience and effectiveness.

AcadiaSoft Services

AcadiaSoft Working Groups

AcadiaSoft's Working Groups provide a unique forum for firms as they complete the Custodian Set-up and on-boarding processes – enabling community members to benefit from the industry's collective experience and 'lessons-learned' to streamline and maximise the efficiency of this process – which may stretch resources depending on the number of Custodians being connected to.

Calculation & Operational Set-up

Building on the planning and preparation completed thus far, firms will need to develop or outsource the infrastructure required to compute margin under UMR and operationally support the daily margining process. From preparing the regulatory IM calculator, integrating / preparing to integrate with best-practice industry platforms including AcadiaSoft’s IM Exposure Manager and ISDA’s Crowdsourcing Utility, developing backtesting / benchmarking routines on annual & quarterly basis along with internal monitoring, and then developing the necessary operational capabilities.

AcadiaSoft Services

Advisory Service

AcadiaSoft’s Advisory Service supports firms as they transition from planning to execution – sharing the benefit of experience gathers across Phases 1, 2 & 3 with the world’s largest financial institutions.

Sensitivities Calculation

AcadiaSoft’s Sensitivities Calculation Service fully automates the initial margin process: calculating sensitivities and seamlessly generating the Common Risk Interchange Format (CRIF) file that forms the input to the SIMM™ calculation.

Initial Margin Exposure Manager

AcadiaSoft's Initial Margin Exposure Manager (IMEM) provides end-to-end IM reconciliation and calculation, helping bring firms into compliance with the new regulatory requirement to collect and post IM held in a segregated account.

Benchmarking & Backtesting

AcadiaSoft offers an ISDA SIMM™ Backtesting & Benchmarking Service that includes both backtesting of SIMM™ over a historical period and benchmarking SIMM™ against three industry-standard risk methodologies to assist in monitoring the effectiveness of SIMM™ as a margin model.

Negotiate/Execute Documentation & Go-live Testing

Bilateral Initial Margin CSA or collateral transfer agreement / security agreements, for each counterparty pair, will need to be in place before the Phase 5 go-live date – and tested on executions of bilateral IM CSA as well as trilateral with custodian account. Ensuring that all necessary relationships are live and ready for activation, ideally three months out from Phase 5 go-live, provides peace of mind and regulatory reassurance that all obligations have been met.

AcadiaSoft Services

Advisory Service

AcadiaSoft's Advisory Service support clients by overseeing the complete testing routine, to ensure that any gaps are identified and corrected.

AgreementManager

AgreementManager - an AcadiaSoft HUB application - establishes an authoritative source of Collateral agreements through common standards and a unified workflow. AgreementManager enables comparison, validation and affirmation of existing agreement data via a single interface.

I Don’t Know

AcadiaSoft is the industry's one-stop-shop for Uncleared Margin Rules compliance – contact us today for advice on identifying whether your firm is in-scope for Phase 4 or 5, and to learn how our unique Advisory Services and AcadiaSoft Hub applications can reduce your UMR burden.

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