Fimat Group Launches Pilot in Portfolio Margining for Hedges
The Fimat Group is launching a program offering hedge funds and certain other clients portfolio margining for broad-based index options and corresponding exchange traded funds (ETFs).
Fimat Preferred and its parent company, Fimat USA, a wholly owned subsidiary of Societe Generale Group, each received regulatory approval to use a portfolio risk-based method to calculate margin requirement for certain clients. This followed recent rule changes regarding risk-based margining approved by the Securities and Exchange Commission (SEC) on July 14, 2005.
"As the markets evolve and become increasingly more complex, sophisticated participants demand value-added services to help them maintain a competitive advantage," stated Douglas Engmann, managing director of equities in North America for Fimat and CEO of Fimat Preferred, in a release. "I am confident that the portfolio margining pilot will provide our clients with greater flexibility when using margin and is likely to be embraced by the hedge fund community," further stated Engmann in the release.
Separately, Fimat Group filed a comment letter, "On Portfolio Margining",with the SEC applauding the New York Stock Exchange (NYSE) and Chicago Board Options Exchange (CBOE) proposals to permit cross margining of futures, securities and other instruments on a portfolio basis. Both Fimat Preferred and Fimat USA are currently preparing to offer such a portfolio margin facility in the United States - if and when approval of the NYSE and CBOE proposals are granted. Fimat Group already offers such a facility in Europe.