Commerzbank has become the first sell-side institution to sign up for OpenGamma’s new margining service. This comes at a time when Category 2 market participants are just two months away from joining Category 1 institutions in the obligation to clear OTC derivatives under EMIR.
Mandatory clearing creates an urgent need for institutions to run analysis to quantify the impact that clearing will have. OpenGamma’s new hosted service, launched in January, provides access to margin analysis with no overhead required for data integration or local software deployment. OpenGamma for Margining enables customers to compare OTC and ETD margin requirements across multiple CCPs (LCH, CME and EUREX)
Nick Chaudhry, Head of OTC Clearing at Commerzbank Corporates & Markets, the investment banking division of Commerzbank AG, explained, "This agreement allows Commerzbank to focus on our OTC Clearing strengths, assured that vital margin analysis coverage we provide for clients remains in step with market developments - all at a crucial stage in the onset of central clearing. The trend towards pre-trade margin comparison requests is marked and the partnership with OpenGamma provides our clients with access to a cost-effective market-leading analytics service".
“We are seeing increasing demand in the run-up to Category 2 clearing, as buyside firms need a cost-effective method of analysing the impact of initial and variation margin,” says Peter Rippon, COO of OpenGamma. “From position data supplied by one firm, we ran OTC margin calculations across CCPs (LCH, CME, Eurex) for all the funds impacted by the Category 2 mandate. The initial margin requirements varied by up to 30%, implying £100 million difference in the required initial margin.”