Clearing and Collateral Management

Enhanced Margin Management Under UMR

Maximizing Returns with Integrated Funding Solutions

October 2020

The Uncleared Margin Rules (UMR) increase operational and collateral-driven funding costs.

The rules target a drawdown of leverage in the market from bilateral trades by requiring increased collateralization aligned with central clearing counterparties’ policy that members must post initial margin and variation margin. Cleared and uncleared trade paths will be markedly similar.

Affected firms will need a decision-making strategy to manage margin volumes and funding costs, as well as liquidity flexibility to meet requirements and avoid costly charges. A transparent lens into dynamic market opportunities will become the key differentiator in the highly competitive asset management industry.

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Collateral+ Podcast Series: Clearing in Focus

Ingvar Sigurjonsson and Travis Keltner, managing directors in our Financing Solutions and Collateral Optimization group, discuss how the calculus for certain financing transactions and collateral management, particularly related to clearing, has changed in recent years.