Sell-Side Technology Awards 2016:Best Sell-Side Newcomer (Vendor or Product) — AcadiaSoft

This year's winner, Norwell, Mass.-based AcadiaSoft, has continued that trend with its Collateral Hub solution, addressing a number of acute challenges around heretofore complex collateral management functions.

First unveiled in July 2015, the Collateral Hub is the fruition of AcadiaSoft’s initiative to tackle upcoming collateral regulations in the over-the-counter (OTC) derivatives space due to come into effect in September of this year, which will mean substantial changes to the margin calculation process, creating an increase in margin activity and collateral movements. The vendor believes that the challenges of new collateral requirements could not be overcome through a fragmented approach of proprietary, manual and email-based margin processes, and instead set out to create a single, unified industry-standard that provides a common framework for margin calculations, reconciliation and communication.

The Collateral Hub, launched with the support of 28 banks, provides non-cleared OTC derivative market participants with a central margining platform that standardizes and integrates margin calculations, reconciliations, communication and disputes management for sell-side firms and their counterparties. By providing a common framework with a standard margin calculation methodology and the ability to compare necessary inputs that include risk factor sensitivities, the Collateral Hub enables participants to identify and minimize disputes at the input level before issuing margin calls. Collateral Hub also delivers operational efficiencies and improved risk mitigation processes by replacing phone and email communications with electronic, automated, straight-through processing.

AcadiaSoft planned, developed and released Collateral Hub in the space of six months, and is part of a series of products released by the vendor to facilitate compliance with non-cleared margin rules rolled out by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO). In June last year, the firm rolled out its electronic margining platform for OTC derivatives, MarginSphere2, with a further messaging upgrade, MarginExpress, added two months later.

The release of Collateral Hub is also the first phase in linking AcadiaSoft’s platform with OTC post-trade services provider TriOptima’s triResolve service, designed to enable market participants to calculate and reach agreement for exchanging initial and variation margin amounts, identify and reconcile differences, and prevent disputes. 

The Collateral Hub, launched with the support of 28 banks, provides non-cleared OTC derivative market participants with a central margining platform that standardizes and integrates margin calculations, reconciliations, communication and disputes management for sell-side firms and their counterparties.