Transcend, a provider of collateral, liquidity, and funding solutions, and Acadia, a provider of integrated risk management services, have partnered to deliver an automated Collateral Validation Service. This service allows the buy-side and broker-dealers to manage the growing complexity and volume of margin activity driven by Uncleared Margin Rules (UMR). Transcend and Acadia’s Collateral Validation Service is designed to ensure that all end of day collateral balances held at third-party and tri-party custodians meet the required criteria, including collateral eligibility, sufficiency, concentration, and wrong-way risk according to the requirements defined in their related collateral agreements.
This service integrates Transcend’s tri-party and custodian connectivity and collateral validation analytics with Acadia’s margin, collateral, and agreement management products. Delivered together, the combination provides sophisticated validation capabilities in accordance with client agreements and transparently communicates results daily, the companies said.
By ensuring clients’ collateral portfolios effectively mitigate their derivatives exposures, the Collateral Validation Service will help firms comply with UMR Phase 6 requirements and address the manual challenges that clients in earlier phases of UMR are still looking to resolve. The service will be hosted on Acadia’s platform independent of a client’s existing collateral management workflow, ensuring flexibility.
“With increased pressure from UMR, asset managers and broker-dealers alike are challenged with creating efficient and scalable processes for new compliance requirements. Our Collateral Validation Service empowers firms to confidently and seamlessly respond to the new and existing margin requirements,” said Bimal Kadikar, CEO of Transcend. “As we formally extend Transcend’s offerings to the buy-side, we are excited for the many opportunities ahead with Acadia and look forward to expanding our capabilities in new, transformational ways.”
“Acadia provides a range of services that assist firms with their regulatory requirements. By partnering with Transcend, we continue to ensure that our clients benefit from a more streamlined and automated approach to UMR compliance,” added Mark Demo, Acadia’s head of business development. “Our overarching goal is to deliver value and reduce risk for our clients and we are excited by this partnership since it firmly delivers on this objective.”
The connectivity, interoperability, and automation powered by Transcend and Acadia’s joint Collateral Validation Service delivers a validation workflow for buy-side and sell-side participants on a global scale. As Transcend and Acadia kick off their partnership, the companies said they are already exploring a number of other collaborative opportunities to meet increasing demand.