With less than six months to go before Phase Five of the Uncleared Margin Rules (UMR), Bob Stewart, Executive Director of ITP Product Management at DTCC, commented on firms’ preparedness ahead of the implementation.
Bob Stewart, said –
“There are now less than six months to go before Phase Five of the Uncleared Margin Rules (UMR) is implemented. Without doubt, this Phase will capture a significant number of firms that trade over-the-counter derivatives, requiring in-scope firms to make substantial changes to their existing collateral management processes, many of which are currently manual and lead to increased operational cost and risk. Therefore, it is critical that these firms are focused on their preparations now, in order to be confident they will be able to comply with the new rules.
“Firms should view compliance with UMR as an opportunity to introduce best practices to their collateral management processes. Not only can these enhancements improve operational efficiencies but they can also allow firms to use their available collateral more effectively, thereby leading to improvements in capital and liquidity management.”