Nordea Engages AcadiaSoft for Initial Margin Backtesting and Benchmarking
AcadiaSoft’s IM Backtesting and Benchmarking Service allows firms to meet regulatory requirements in a more cost-effective manner
AcadiaSoft Inc., the leading industry provider of risk and collateral management services for the non-cleared derivatives community, today announced that Nordea, the leading bank in the Nordic countries and one of the biggest banks in Europe, will outsource its initial margin (IM) backtesting to AcadiaSoft. AcadiaSoft’s IM Backtesting and Benchmarking Service was launched in 2018 as part of its partnership with Quarternion to provide risk services for firms subject to IM requirements for the non-cleared derivatives market.
“Initial margin backtesting and benchmarking is one of the more complicated requirements of the uncleared margin rules,” said AcadiaSoft CEO Chris Walsh. “We’re pleased to work with Nordea to ensure that they are in compliance with the rules and to help mitigate the drain on internal resources. This service is a prime example of our commitment to provide the industry with standardized, cost-effective solutions to ease the burden of ever-evolving regulations.”
AcadiaSoft’s IM Backtesting and Benchmarking Service helps firms meet the requirements for ISDA SIMMTM validation by providing both back-testing of SIMM over a historical period and benchmarking SIMM against three industry-standard risk methodologies. Outsourcing this complex reporting allows firms currently in-scope for the uncleared margin rules to further reduce costs and improve efficiency.
“Complying with the uncleared margin rules under ISDA SIMM can be a complex task requiring a potential drain on internal resources,” said Michael Kjørtsholtsen, Head of Risk Control at Nordea. “However, our decision to outsource the static IM Backtesting & Benchmarking reporting to AcadiaSoft has proven to be an efficient solution for Nordea. It is possible to use the reporting as documentation of compliance with IM backtesting and benchmarking requirements to regulators.”
The IM Backtesting & Benchmarking service is part of a growing suite of services designed to help firms comply with regulations by outsourcing the complex and challenging aspects of calculating IM and the adoption and monitoring of SIMM to AcadiaSoft.
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