Charles River bolsters collateral management processes with AcadiaSoft

Margin calls and collateral estimates have been automated on the Charles River IMS with the help of AcadiaSoft.

Charles River Development has formed a partnership with AcadiaSoft to automate certain communications for collateral management processes within its Investment Management Solution (IMS).

The alliance will see the automation of margin calls and collateral estimates between counterparties on the IMS for over-the-counter (OTC) and exchange-traded derivatives through AcadiaSoft’s MarginSphere service.

Increased collateral and margin requirements for non-cleared derivatives have been introduced across the industry as a result of regulations such as EMIR and Dodd-Frank. Charles River said that working with AcadiaSoft will simplify workflows for buy- and sell-side firms, as well as fund administrators and clearing firms engaged in the collateral management and margin requirements.

“Our partnerships with leading providers of collateral management services help our clients keep pace with new regulations governing OTC derivatives,” said John Plansky, Charles River’s chief executive. “With derivatives seeing increased use by institutional portfolio managers, the alliance with AcadiaSoft helps our clients seamlessly support the full lifecycle of these instruments.”

Scott Fitzpatrick, director of the collateral business and client operations at AcadiaSoft, added that manual processing can be prone to error, costly and risky to support the current and also emerging regulations.

“MarginSphere provides a central margin service for the industry that replaces email and other manual, proprietary practices with an automated, standard and verifiable electronic process for all parties,” he added.

The non-cleared derivatives risk and collateral management services provider said in November that European hedge fund Brevan Howard joined its Initial Margin Exposure Manager network to manage its compliance with the regulatory requirements. Brevan Howard was one of the first buy-side firms to fall into the scope of Phase 3 of the non-cleared margin rules which came into force on 1 September. The hedge fund now uses the tool to reconcile two-way initial margin with its derivatives trading counterparties under the rules.