Margin Xchange to Address Regulatory Challenge in Derivatives Market


By Robin Moody, Global Head of SmartDX™

Initial Margin (IM) regulations are already impacting about 40 bank groups globally and that number will grow exponentially over the next two years. To assist the derivatives market in processing the high volume of new negotiations and the extension of IM requirements to buy-side entities, we have teamed with Allen & Overy and IHS Markit to launch Margin Xchange™.

Margin Xchange is an online platform that covers all stages of the mass repapering of derivatives contracts required to comply with IM regulations. It provides information reconciliation, document generation, negotiation and execution, case management and a full data export. It not only drives greater cost and time efficiency in the process for agreeing the documents, but also achieves the long-held goal of treating derivative documents as data, by using a document format that is human and machine readable.

Margin Xchange puts the entire process on to a single online platform. It enables counterparties to bulk import and reconcile counterparty data; mass upload and agree their term sheets; generate and customize all IM documents; run all negotiations and drafting; execute by electronic signatures and capture the full audit trail of every negotiation point, internal escalation and sign-off. Crucially, users will be able to record every variable as a data point, rather than text, enabling them to maintain a clear view of progress at every stage during the repapering task, provide higher quality progress reports to regulators and represent the documents as data that can be stored and interrogated in the future with ease.

Margin Xchange combines SmartDX™ data and process management expertise with Allen & Overy’s legal knowledge and track record of tech-enabled solutions to meet clients’ biggest, most complex regulatory challenges.  We are excited that Margin Xchange will allow users to achieve the highest standards of risk management and governance in IM, reduce the time and cost of the repapering exercise and maximize the efficiency of negotiations. It creates a new model for how legal documentation could be drafted, negotiated and recorded in the future.



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