SmartStream & Numerix to Help Clients Meet ISDA Regulations

SmartStream Technologies, a financial software provider, announced this Wednesday that it has partnered with Numerix, a provider of risk technology solutions. Under the collaboration, SmartStream has a put a referral agreement in place with Numerix.

This agreement was established to support its end users who need to comply with the International Swaps and Derivatives Association (ISDA) Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term, regarding Margin Requirements Margin Requirements A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen A margin requirement is defined as the minimum equity sum that investors must keep in their margin account preceding a trading transaction. Margin requirements may be referred to as maintenance margin, minimum maintenance, or maintenance requirement. This is a requirement for broker trading in any asset class.In terms of equities, the New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) have a fixed margin requirement of 25% of the sum value of the securities presen Read this Term for non-centrally cleared derivatives.

These margin requirements are based on guidelines from the Basel Committee on Banking Supervision (BCBS) and Board of the International Organization of Securities Commissions (IOSCO).

The guidelines, seek to establish international standards for margin requirements, which will be implemented over a period of time. In essence, the guidelines state that adequate margining practices should be used for all derivatives that are not cleared by central counterparty clearing houses (CCPs).

In order to comply with guidelines, ISDA has proposed a Standard Initial Margin Model (SIMM™). This model can be used by market participants in order to provide transparency in the collateral management space.

SmartStream Combines TLM Collateral Management with Numerix Technology

By utilizing its computational abilities, Numerix is able to generate the risk sensitivities which are required by ISDA’s SIMM™ that is used for initial margin calculations. Therefore, the collaboration between SmartStream and Numerix will help to reduce counterparty disputes and operational costs for its clients operating in the collateral management space for over-the-counter (OTC) derivatives.

Commenting on the partnership, Jason Ang, Program Manager for TLM Collateral Management, SmartStream, said: “SmartStream’s TLM platform is proven to manage credit and operational risk through collateral management, we are delighted to be working alongside Numerix, whose expertise will complement our ability to manage complex business requirements in this space”.

“As new transactions become subject to initial margin requirements, front-to-back SIMM™ calculations, including the generation of fast and accurate SIMM™ sensitivities, have become critical. By partnering with SmartStream we are happy to make Numerix SIMM™ capabilities available to a greater set of market participants,” added Steve O’Hanlon, the CEO of Numerix.