Pimco adopts OpenGamma analytics for uncleared margin rules

Pimco will use OpenGamma’s technology in a bid to reduce margin financing costs for derivatives trading.

Fixed income investment firm Pimco has implemented technology and analytics from OpenGamma in a bid to optimise derivatives margin processes for clients.

Pimco will use the software-as-a-service service to reduce margin financing costs for derivatives trading by evaluating the clearing options across global exchange groups and clearing houses.

Executive vice president and head of Americas operations at Pimco, Josh Ratner, said fixed income asset managers must adapt the way they trade derivatives under regulations such as the uncleared margin rules.

The uncleared margin rules will require firms to post collateral to a segregated custodian for non-cleared derivatives trades, including FX forwards, cross-currency swaps, exotics and equity options, either on a tri-party or third-party basis. Asset managers, pension funds and insurance companies will come in scope of the rules, based on their derivatives volumes threshold from 1 September 2020 and 2021.

“With this in mind, we’re constantly on the lookout for the right technology to drive efficiencies, and so are very excited to be partnering with OpenGamma. Their solution will form an important part of our overall approach to delivering operational efficiencies for derivatives for our clients,” Ratner added.

Last month, OpenGamma confirmed Denmark’s largest pension funds, ATP and PFA, have also adopted its cleared and uncleared derivatives analytics ahead of the implementation phases of the bilateral margin rules in 2020 and 2021.

“We are proud to be working with Pimco to deliver operational efficiencies for their derivatives trading. We’re extremely eager to help Pimco build upon their current status as a leader in their field,” Peter Rippon, CEO of OpenGamma, added.