Featured on the Securities Lending Times
Sophie Marnhier Foy examines the data challenges faced by firms in calculating ISDA SIMM inputs and warns against shifting the data problem back to the user and incurring additional cost.
Feedback from participants in the first four Uncleared Margin Rules (UMR) phases suggests that providing the data required for the International Swaps and Derivatives Association (ISDA) standard initial margin model (SIMM) in the correct format is not a straightforward process. Many smaller firms which generally make up phases five and six, are finding it a very real challenge indeed. One reason is the difficulty in pulling together all the data puzzle pieces from the different systems on which they are stored and providing them in the correct format for the ISDA SIMM calculations.
Achieving successful UMR compliance relies on having access to solutions that reduce the complexity of the process in a partnership between vendors and clients which goes beyond vendors simply requiring prepackaged data to be provided in a mandatory format.