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HSBC among early adopters of new Bloomberg collateral system
10 January 2017
Platform offers cross-product, cross-asset support for Dodd-Frank and EMIR compliance
HSBC Private Bank is among more than a dozen financial
institutions to sign up as early adopters of a new Bloomberg
collateral system designed to help firms tackle new margin
rules taking effect in March.
Bloomberg said on Wednesday its MARS collateral management
programme is meant to assist banks, investment firms and
corporations with the collateral management and reconciliation
processes required to comply with the margin rules that apply
to non-cleared swaps in March.
"It's a business imperative to trade these types of
instruments, so compliance too becomes a business imperative,"
said Kate Adjaoute, managing director at HSBC Private Bank. "We
anticipated these reforms were coming. It helps to centralise
the process and have access to the data we need as well as the
counterparties with whom we trade.ˮ
The new rules are intended to reduce systemic risk, but also
to lessen the operational and compliance burden for
Phil McCabe, global product manager for collateral
management at Bloomberg, stressed the challenges investors face
in the over-the-counter (OTC) derivatives market "cannot be
addressed with software alone".
Bloomberg said MARS allows customers to centralise their
collateral management workflow and automate how they manage and
monitor risk exposure and collateral positions.
The new platform offers cross-product, cross-asset support
for Dodd-Frank and European Market Infrastructure Regulation
compliance, legal documentation capture, automated messaging,
risk analytics and portfolio reconciliations, according to the
"The need for simplification and automation of risk and
compliance processes has encouraged adoption of cloud-based
technologies and managed services," said Hugh Stewart, research
director at Chartis Research, a tech consultancy.
Bloomberg also said on Wednesday it has licensed the
standard initial margin model (SIMM) for calculating initial
margin to help trading desks and collateral managers calculate
the amount of collateral that needs to be posted.
Firms in the $200 trillion market for non-cleared OTC
derivatives must adhere to stricter requirements from March.