Free AANA Snapshot: Your UMR Compliance Depends on it
Cassini Systems, the leading provider of pre-and post-trade margin and collateral analytics for derivatives market participants, is offering firms an AANA (Average Aggregate Notional Amount) snapshot free of charge to provide firms with guidance on where they can reduce their AANA levels. This report is an invaluable tool for companies either in scope for UMR (Uncleared Margin Rules) or on the cusp of falling into scope. Further, Cassini has released a whitepaper to educate the sector on the latest AANA calculation requirements for multiple regions and the benefits of continuous monitoring and optimization of AANA before the designated reporting period.
Over the past twelve months, the combined effects of market instability and tightening regulations have led to huge spikes in IM (Initial Margin), and so, a firm’s ability to reduce the impact of UMR on their business operations can be the difference between sustained success and failure. Now, as the calculation period for AANA approaches, it is apparent to those familiar with the rules that understanding and monitoring the AANA calculations as early as possible is critical for any firm to succeed.
This need for firms to proactively manage their AANA is heightened by the fact that there are now changes in the monitoring periods and compliance dates for post-phase 6 firms to be aware of. Most importantly, effective management allows firms to reduce business costs and optimize trading exposure. Long-term monitoring strategies are also essential for firms wanting to analyze their AANA levels or, for firms already captured under UMR, balancing exposure across counterparty agreements, potentially moving out of scope.
Thomas Griffiths, Head of Product of Cassini, said, “We’ve found with our clients that the level of uncertainty around knowing whether they were in scope for UMR caused a significant drain on their business. Continuously monitoring and optimizing their AANA gave them the confidence to adapt their trading strategies and put them on the front foot for their UMR compliance.”
For previous UMR phases, Cassini has been the go-to system for firms to analyze whether they fall in scope or not and implement long-term strategies to identify consumers of margin at pre-trade. This has helped clients put in place strategies for trading in the most cost-efficient manner and immediately identify trading agreements which fell in scope for UMR. Analyzing AANA by tracking the calculation and warning thresholds over time, ensured firms could proactively plan and manage when the firm might move in or out of scope for UMR.