BNY Mellon joins derivatives industry platform to ease initial margin documentation

BNY Mellon will use the ISDA Create platform to enable its buy-side clients to electronically amend and update their initial margin documents.

By Joe Parsons

BNY Mellon is the first custodian to go live on a platform designed by the International Swaps and Derivatives Association (ISDA) to ease documentation of initial margin requirements.

ISDA, alongside Linklaters, added a new custody function to the ISDA Create platform, an online solution aimed to automate the processes of producing and agreement documentation.

With the new functionality, users will be able to access bilateral custody agreements and tri-partite account control agreements (ACAs) in digital form on the ISDA Create.  

“We are always looking for ways to simplify the non-cleared margin workflow for clients and enable them to service the entire collateral lifecycle with the minimum number of touch points. ISDA Create does precisely that, providing an efficient, all-in-one automated documentation solution for clients that we are very happy to support,” said Jonathan Spirgel, global head of segregation and liquidity services, BNY Mellon.

ACAs govern the terms of collateral segregation and management between a custodian and two trading counterparties, while bilateral custody agreements govern the pledging of a client’s unencumbered assets with a custodian.

The platform will significantly help buy-side firms that are required to post collateral to a segregated custodian for non-cleared derivatives trades, to amend and arrange documentation electronically.  

“We’re delighted to welcome BNY Mellon onto the ISDA Create platform as our first custodian. This will significantly reduce the burden on those firms that are in-scope for regulatory IM requirements, and creates a one-stop shop for their IM documents. We’d like to thank BNY Mellon for working with ISDA Create to bring this service to market,” added Doug Donahue, partner at Linklaters.

BNY Mellon has built up its collateral management tools throughout the year, with the aim to be the custodian of choice for buy-side firms to comply with the initial margin rules.

Earlier this year, BNY Mellon developed an end-to-end collateral management solution, in partnership with AcadiaSoft, allowing its buy-side firms to fully outsource their entire collateral workflow.

The latest phase of the initial margin requirements for non-cleared derivatives has gone live, requiring firms with an average aggregate notional amount (AANA) of $750 billion to comply with the rules. It marks the first time that true non-dealers have been brought into scope.