Initial margin rules, which aim to mitigate counterparty risk, have been progressively coming into force since 2016. Waves 5 and 6 - for institutions with non-cleared derivatives positions above EUR 50 billion and EUR 8 billion respectively - will come into force in 2021 and 2022.
BNP Paribas Securities Services’ initial margin solution, live since 2017, enables financial institutions to outsource the complexity of implementing initial margin models and processes thanks a full range of open architecture services. These include risk factors and initial margin calculations, exposure management, exchange of initial margin calls and a triparty collateral management solution with segregated custody arrangements.
David Beatrix, Head of Product, Collateral Access, at BNP Paribas Securities Services, said:
“Asset owners can have a challenging time when implementing initial margin requirements due to the size of their derivative positions and the fact that they tend to operate under one single consolidated entity. Asset owners also tend to delegate their investment process across multiple managers, which can result in fragmented initial margin calculations leading to higher collateral requirements. Our services take the complexity out of the process, enabling asset owners to centralise their calculations and adopt a streamlined and efficient approach to initial margins implementation.”
Philippe Tassin, Head of Asset Owners and Managers at BNP Paribas Securities Services, said:
“For our asset owner clients, calculating their collateral needs, and optimising often scarce collateral resources, have become vital to the success of their investment and risk management practices. Our solutions help them manage the huge amount of data and complex calculations associated with OTC derivatives regulations.”
BNP Paribas Securities Services is growing quickly in Asia, where it is working with some of the biggest financial institutions in the region. The Bank was recently awarded Custodian of the Year by Asia Risk and its Predictive Collateral Coverage Reporting won The Asset’s “Best data analytics project” award.
 Source: https://www.risk.net/awards/7674186/custodian-of-the-year-bnp-paribas
 Source: https://www.theasset.com/awards/digital-project-awards-20
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About BNP Paribas Securities Services (www.securities.bnpparibas.com)
BNP Paribas Securities Services, a wholly owned subsidiary of the BNP Paribas Group, is a leading global custodian and securities services provider. Backed by the strength of the BNP Paribas Group, we provide multi-asset post-trade and asset servicing solutions for buy and sell-side market participants, corporates and issuers. With a global reach covering 90+ markets, our network is one of the most extensive in the industry, enabling clients to maximise their investment opportunities worldwide.