Investment Operations

Uncleared Margin Rules and the Rise of Initial Margin Optimization

As the industry prepares for the next phases of UMR, the full impact of the challenges it will face are still unknown, according to the latest Aite Group report.

The onset of UMR has created an industry need for better management of initial margin. In a space that was once dominated by a single provider, competition and innovation have led to a breakup of the monopoly and the expansion of solutions. As the industry prepares for the next phase of the rules, third-party solutions providers are creating more ways to compress previously uncompressible portions of the market. In this new report, Uncleared Margin Rules and the Rise of Initial Margin Optimization, Aite Group discusses the impact of UMR on technology aimed at both portfolio compression and initial margin optimization.

“While portfolio compression services have been available since 2003 and have created a framework to realize capital efficiencies, UMR has catapulted initial margin optimization solutions to the forefront,” explains Audrey Blater, Ph.D., senior analyst at Aite Group. “New entrants and technologies have enhanced optimization across central counterparties, cleared and noncleared products, and multiple instruments,” she adds.

This report discusses the challenges and potential solutions affecting both buy-side and sell-side firms across asset classes, and it profiles Capitalab (a division of BGC Brokers L.P.), CME Group Inc., LMRKTS, Quantile Technologies Limited, Synswap, and TriOptima AB. The report is based on Aite Group’s interviews of over 25 global financial markets participants to obtain information about the challenges and solutions around UMR, and on statistical data that was obtained from Clarus Financial Technology, the International Swaps and Derivatives Association, and various central counterparties.

To request a press copy of this report or to speak with Audrey Blater, Ph.D. about this topic, please contact us at