TriOptima, the margin service owned by CME Group, is offering Swift access to the four main margin-processing banks, reducing the effort for fund managers that need to comply with regulation that takes effect next month.

TriOptima said on Wednesday it is offering Swift access to BNY Mellon, Clearstream, Euroclear and J.P. Morgan, the four main tri-party margin banks.

September will see the introduction of the fifth phase of the uncleared margin rules (UMR) that require larger asset managers to comply with the margin regulation for the first time.  

Swift is the de facto messaging network used by banks and asset managers so the ability to use that network to route messages to the banks should help TriOptima clients preparing themselves for the new margin regime.

“Extending the margin call process to incorporate instructions to the custodian reduces the manual steps in the process which ultimately reduces the risk of delayed or failed settlements,” said Joakim Strömberg, head of triResolve Solutions at TriOptima.

TriOptima said, under the new rules, clients will have to be able to send instructions, and receive instructions and end-of-day reports from the custody banks.

Ted Leveroni, head of Margin Services at BNY Mellon, said: “With just a few weeks to go until the September go-live, and the bigger challenges to come in phase six, TriOptima’s integration with Swift will greatly expedite the onboarding process for mutual clients turning to our firm to connect them to the services they need to meet their UMR obligations.”

Ed Corral, global head of Collateral Management Strategy at J.P. Morgan, said: “The integration between tri-party agents and TriOptima via Swift is an important step forward for the market in an effort to simplify onboarding and ease the burden of testing for mutual clients.”

The uncleared margin rules have been rolled out on phases starting in 2016. The fifth phase was postponed to September this year from September 2020 due to COVID-19.

The next phase will require that firms with uncleared swaps worth more than €50bn (£42.6bn) start to post margin against those swaps for the first time.

The sixth phase, due to take effect in September next year, will see the threshold for compliance drop to €8bn, which will cover even more fund managers, small banks and corporates.

US post-trade giant DTCC warned last week that many firms are “behind on preparations” for the next round of UMR.

Bob Stewart, executive director of Institutional Trade Processing at the DTCC, said: “The deadline for implementation is looming and many firms remain behind on preparations. These firms should act now.”