Uncleared Margin Rules – Now is the Time

Hazeltree and UMR

Uncleared Margin Rules are here. 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. Phase 6 of the rules took effect in September 2022. Hazeltree is helping clients meet UMR requirements.

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    Learn More About Hazeltree UMR Solutions

    Hazeltree UMR Collateral Manager™ is a next-generation collateral and exposure management solution designed specifically for the buy-side. Our UMR Solution streamlines the compliance with these complicated regulatory collateral requirements. Hazeltree UMR Collateral Manager enables clients to monitor counterparties, mitigate risk and optimize capital usage across their uncleared OTC agreements.
    Hazeltree’s solution includes the following features:

    • AANA Estimator: Gain a comprehensive view of all legal entities and their Average Aggregate Notional Amount (AANA). Our solution provides an early warning system to entities that approach inclusion in Reg IM, with the ability to monitor AANA on a daily basis, not just during the regulatory mandated monitoring period.
    • Flexible Reg IM approach: Regardless of the margin approach selected (Distinct, Greater of or Allocated), our solution can satisfy one or all three approaches, across multiple counterparties.
    • Connectivity to Segregation Agents: Our UMR solution can support both Triparty and Third-Party Custodial Segregation models, as well as direct connectivity to all Segregation Agents. It can also provide RQV (Required Value) for Buy-Side firms that are accepting Collateral from their Counterparties.
    • Document Management: Store your collateral documents, including CSA and Collateral Schedules within the solution for immediate review.
    • Market participants can also benefit from our unique algorithmic rules engine, Hazeltree Optimizer™, to automatically manage collateral calls based on desired targets and tolerances.

    Learn More About UMR

    Considerations For Firms Who Are Approaching the UMR Threshold: Lessons Learned And Key Takeaways From Previous Phases

    In September 2022, regulators introduced Phase 6 of Uncleared Margin Rules (UMR), ushering in new legal requirements for a wider group of funds. Funds with an average aggregate notional amount (AANA) of over $8 billion are now considered in scope and many new firms have come into scope during the 2023 AANA observation period (March…


    As the Dust Settles on UMR, Many Firms Look to Increase Efficiency and Take Advantage of Opportunities Ahead

    We’re now more than eight months removed from the sixth and final cohort of firms subject to UMR regulation, and more than 20 months removed from those who fell under Phase 5. Firms that scrambled to cobble something together to comply by the deadline now have some time to look back at how they’ve managed…

    digital tools for UMR efficiency

    How Firms Approach and View the Use of Subscription Lines

    The concept of subscription (sub) lines has been around for decades. However, longer-dated sub lines are all the craze right now because they can have a material impact on net IRR in the early years of the fund’s life and with rates at historic lows.  To learn more about the changing dynamics of how firms…

    What Do Managers Need to Do to Prepare for UMR? Five Things to Consider

    This blog is part of our comprehensive UMR whitepaper. Click here to see the full paper. Fund managers have many decisions to make surrounding the new Rules for IM on U-OTC. They will need to assess whether their fund(s) will fall within the rules and, if they come in scope of the rules, how they…

    Breaking Down the Legal Documentation and AML/KYC Challenges Associated with UMR

    This blog is part of our comprehensive UMR whitepaper. Click here to see the full paper. Organizations readying themselves to comply with UMRs face a litany of tasks that need to be completed in a timely manner. Another area firms will need to deal with are the legal documentation changes that come with U-OTC trading….

    UMR Readiness Alert: Phase 6 Brings New Contractual Requirements

    This blog is part of our comprehensive UMR whitepaper. Click here to see the full paper. Phase 6 of the Uncleared Margin Rules (UMR) for derivatives trading arrives this September and will usher in new legal requirements for a wider group of funds. For funds that fall in scope of Phase 6 and exceed the…

    What Does ‘Cash Optimization’ Mean for a PE Manager?

    UMR Decision Workflow

    Use AANA estimator daily to monitor your risk of getting caught up in UMR As you get close to the $8 Billion level, begin to work with those counterparties to establish your REG IM CSA documents Select a Segregation agent to hold your Initial Margin. a. Decide which segregation model you will use i. Tri…

    What is UMR?

    As a result of the global financial crisis, the G20 countries committed themselves to reforming the Over the Counter (OTC) derivatives market. There were two main components to these reforms, the first was that standardized derivatives would be cleared at central counterparties (CCPs) to help mitigate the counterparty credit risk presented by bilateral trading. The…

    Under 50 Million: What you need to know about the UMR IM Threshold

    When global regulators were writing the rules for UMR, there was general agreement that those rules should not necessarily require a small volume of uncleared OTC derivative trades to trigger a requirement to post collateral.  The regulators eventually settled on an IM threshold of $50 million in the US, and €50 million in the EU,…

    What Does ‘Cash Optimization’ Mean for a PE Manager?

    The UMR deadline has been extended, and you’re still going to miss it!

    The news last month of a delay to the onset of UMR for phases 5 and 6 was a welcome relief during a time of crisis. Even if a pandemic hadn’t altered our reality, many parties who would have been in-scope for phase 5 in September of this year were not prepared and had found themselves…

    Are you ready for UMR?

    As we leave 2020 behind and start 2021, we find ourselves looking ahead and planning for the new year to come.  For many on the buy-side, that means UMR compliance deadlines.  The 1-year delay from the original September 2020 deadline for phase 5 firms gave us a much needed breather, but as the calendar flips…