BNP Paribas has selected a cleared derivatives margin calculator offered by tech vendor FIS, enabling it to better assess its collateral requirements.
The FIS Cleared Derivatives Margin Advisor replicates margin requirements for current or hypothetical portfolios in real=tome across the exchange-traded derivatives market, and connects to FIS back-office systems or any trading or position-management system to provide an automated calculation for initial margin.
BNP Paribas will use the FIS solution to increase its visibility around initial margin on its cleared derivatives transactions.
“By partnering with FIS, we are able to deliver a self-service margin solution to our risk teams and end-customers in a cost-efficient way,” said Gael Pottiez, head of product development, derivatives execution and clearing, BNP Paribas.
Calculating what level of collateral is needed for a transaction has become increasingly important due to post-financial crisis regulation on the derivatives market, with back-office teams for banks and buy-side alike required to allocate the correct margin and ensure accounts are not capital deficient.
“Being able to quickly and precisely calculate initial margin is critical for institutional investors, investment funds, proprietary trading groups and sell-side firms,” said Martin Boyd, head of the institutional and wholesale business, FIS.
“Margin Advisor is a good example of using advanced automation technology to help firms like BNP Paribas better manage their business and enhance their operations.”