Hazeltree Helps its Phase 5 and 6 UMR Clients Get “Regulation Ready”
NEW YORK, HONG KONG and LONDON, Sept 23, 2021 – Hazeltree, the leading provider of integrated treasury management and portfolio finance solutions for investment managers, today announced that Hazeltree Collateral Management has been successfully upgraded for clients to comply with the next phases of the Uncleared Margin Rules (UMR).
Beginning on September 1st, 2021, Phase 5 of UMR applied to any firm with average annual notional amount (AANA) of uncleared OTC derivatives exceeding $50 billion. The new regulations require in-scope firms to post and receive initial margin in a manner specifically dictated by the rules, representing a brand new and complex process for many firms.
“Hazeltree has developed a comprehensive collateral management workflow that allows clients to operate within the framework of UMR, using the same model as a tier 1 broker-dealer, while still focusing on the unique needs of the buy-side,” said Joe Spiro, Director of Product Management for Hazeltree. “The ability to calculate any of the 3 industry standard margin approaches (Distinct, Greater Of, or Allocated), calculate RQV (Required Value) for triparty accounts, and the expanded functionality for Initial Margin are just a few of the important features that have made this transition smooth for Hazeltree’s clients.”
Phased in over several years, the UMR regulation started with Phase 1 in 2016 and will wrap up with Phase 6 in September 2022. Phase 5 of UMR was the largest to date; Phase 6 is expected to be even larger, covering firms with AANA over $8 billion. Performing the AANA calculation to identify when new funds come into scope will be an important, on-going responsibility for firms, even after the Phase 6 deadline of September 2022. Hazeltree recently released Hazeltree AANA Estimator™ that allows clients to monitor their AANA on a daily basis and prepare for potential compliance with the complicated rules around UMR.
“As our Phase 5 clients experienced, complying with UMR is a long process, and requires preparation,” said Sameer Shalaby, Hazeltree’s President and Chief Executive Officer. “We are proud of the success our clients have had in making this transition smoothly, with Hazeltree’s help.”
Hazeltree has published a whitepaper entitled Clearing Up The Uncleared Margin Rules (UMR): A Comprehensive Guide for Hedge Fund and Asset Managers, to aid Phase 5 and 6 firms in their path to regulatory compliance.