Imagine you work for a bank that offers OTC derivatives clearing services to a range of firms including investment managers, such as multi-strategy, pension funds and hedge funds, and other smaller banks.Firms that have chosen you as their clearing member will very likely look to you to provide them with services including analysis that quantifies and optimises the initial margin they must post.
Some of your clients may be firms unprepared for the EMIR Category 2 clearing deadline (coming into full effect on 21st December 2016) and will presumably have an urgent short-term need.
These firms will need to understand their margin requirement by 21st December, and ideally they will want to ‘cherry-pick’ trades for voluntary clearing from their pre-existing bilateral back-book for an optimal margin outcome.
The challenge will be in performing the necessary analysis in a timely and cost-efficient manner, given the fast approaching deadline and differing portfolio data formats. While you will have access to the cleared portion of the client’s portfolio in the clearing house format, it is expected that the bilateral back-book will only be available in the client’s own internal formats.
This implies significant manual effort to first map,run and then present the analysis in the format the client expects.
OpenGamma has built an analytical service specifically to help buyside firms assess the margin impact of EMIR Category 2. We can turn around margin analysis on a client portfolio typically in less than 24 hours, including mapping their custom portfolio formats. This will ensure that your client gets the value-add analysis that will differentiate the service you offer in comparison to other clearing brokers.