Buy side explores cloud for collateral management

Asset managers with FX positions are looking at cloud-based solutions as a means of coping with variation margin rules

collateral
Weighing risks: buy-side participants are trying to cut down the operations expense associated with new variation margin rules

Asset managers and other buy-side clients are exploring cloud-based solutions to manage collateral as uncleared margin rules raise operational complexities and costs, says Lee McCormack, head of strategy and product development at CloudMargin. In the US, physically deliverable FX forwards and FX swaps are exempt from regulators’ variation margin requirements. But, in Europe, FX forwards and FX swaps are over-the-counter derivatives under the European Market Infrastructure Regulation, and are