Finastra and CloudMargin Collateral Management as a Service Offering Accelerates Compliance with UMR Regulation

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Finastra today announced that its Collateral Management as a Service application – powered by CloudMargin and available through Finastra's FusionFabric.cloud platform – now incorporates new features to help financial institutions comply with the requirements of the Uncleared Margin Rules (UMR).

It is estimated that the new Phase 6 of the UMR, which is expected to take effect in September 2022, will affect an additional 1,000 entities for the first time. For companies that are not familiar with initial margin entry, preparing for UMR can be a significant and time-consuming process. The partnership between Finastra and CloudMargin will make it easier for Finastra customers using solutions such as Fusion Kondor, Fusion Opics and Fusion Summit to submit the necessary data to comply.

Akber Jaffer, EVP, Treasury and Capital Markets Business Unit at Finastra said, “As the UMR deadline approaches, the need for new and complex calculation methods for calculating initial margin is more important than ever. Together with CloudMargin, we are offering our customers a cost-effective and quick-to-adopt solution. Providing warranty management as a service, rather than deploying software on-premises, dramatically lowers the cost of ownership for users and delivers quick results.”

CloudMargin's Software-as-a-Service (SaaS) based solution comes with integration to ISDA standard initial margin model (SIMM) certified partners as well as grid-based methodology support. In addition to margin call calculations, it handles counterparty messaging, dispute management, replacements, settlement and interest payments, and optimizes bank securities inventory for collateral.

Stuart Connolly, CEO of CloudMargin, said: “Now is the time for Phase 6 companies, which will be subject to the UMR for initial margin calls, to start addressing operational and technology challenges ahead of schedule. Our partnership with Finastra makes it easier for companies using Finastra's leading treasury and capital markets solutions to upload their data to CloudMargin and quickly comply with the new requirements.”

By facilitating direct end-to-end processing of derivatives transactions and all associated collateral management workflows, it is estimated that using CloudMargin via Finastra's FusionFabric.cloud platform could result in savings of up to 70% in the total cost of ownership compared to an on-premises solution.