Major market participants —Barclays Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley and State Street are piloting AcadiaSoft's new Web-based portal for collateral management and workflow in OTC derivatives.
The new portal provides a unified, automated venue from which market participants on the buy and sell sides can receive, send and confirm margin calls, thereby replacing today’s less efficient practice of using email, fax and phone, according to the release.
“The importance of properly managing collateral and counterparty risk has never been more important than it is today given the growth in the industry and recent financial market events,” commented Craig Welch, co-founder of AcadiaSoft, in the release, announcing the launch of the new service. “Our service replaces the inefficiencies created by the current, manual approach and offers one that is highly visible and reliable. We believe the benefits offered will help market participants achieve better operational efficiencies and help prepare for future growth.”
The launch of the new collateral management services comes at a time when the OTC derivatives industry is under pressure to standardize and automate its activities. Regulators have called for improved efficiencies and pressed for increased transparency in the pre-trade and post-trade processes via the Dodd-Frank Act.
AcadiaSoft allows dealers and investors to manage all aspects of collateral communications online, giving parties involved in a trade access to the same information simultaneously. Users may view their collateral exposures and commitments and make adjustments as needed. All activity is time stamped and a full audit trail of activity is created. Access is provided through the Internet and in-house collateral management systems can be seamlessly integrated, stated the release.
Welch states that additional users are expected to pilot the system in the near futures. New participants will include dealers as well as administrators, hedge funds and mutual funds.
The latest news follows AcadiaSoft's announcement in January that it began offering collateral management services to clients of MarkitSERV’s leading electronic trade processing platform for OTC derivatives. The new partnership integrates AcadiaSoft into the MarkitSERV portal and expands the scope of MarketSERV’s platform for managing post-trade requirements of OTC derivative transactions.