BNY Mellon simplifies compliance efforts for customers by publishing key custody documents for initial margin requirements on ISDA Create

The custodian’s account control agreements can now be accessed via the ISDA Create platform, allowing firms to negotiate and finalize documents online.

By Wesley Bray

BNY Mellon has published key custodial documentation on ISDA Create, which will allow for the negotiation of custody agreements to be handled with greater efficiency as firms prepare for phase six of the regulatory initial margin (IM) requirements

BNY Mellon’s triparty and third-party account control agreements (ACAs) can now be accessed by market participants via the ISDA Create platform, allowing firms to negotiate and agree those documents online with full digital capture of the resulting legal data.

According to a statement by ISDA, having both BNY Mellon’s ACAs – which govern the terms of collateral segregation and management between a custodian and two trading counterparties – and ISDA’s credit support documents available on ISDA Create means BNY Mellon clients have the opportunity to complete the legal documentation required for regulatory IM on a single platform, simplifying compliance efforts.

“Publishing and negotiating our regulatory initial margin triparty and third-party ACAs on ISDA Create, gives us and our clients the opportunity to complete the legal documentation required for margin segregation service on a common platform,” said Ted Leveroni, head of margin services at BNY Mellon Markets.

“This places us in a better position to service clients during phase six, saves our clients time, simplifies compliance efforts while also giving all participants a complete digital repository of the resulting legal data.”

Phase six of the regulatory IM requirements for non-cleared derivatives comes into force in September next year.

“Phase six of the initial margin requirements will bring several hundred small entities into scope of the rules, many of which lack the resources to conduct lengthy bilateral negotiations of legal agreements with all their counterparties and custodians,” said Katherine Tew Darras, ISDA’s general counsel.

“Having both custody and regulatory IM documentation available on the ISDA Create online platform will bring significant efficiencies to the negotiation process and help phase-six firms to meet the September 2022 compliance date.”

Launched in 2019, with BNY Mellon as the first custodian to join the platform, ISDA Create was originally developed to help firms negotiate IM documentation to comply with new margin rules. The online solution was built by Linklaters’ internal technology start-up Nakhoda and is available to ISDA members and non-members.