Four investment banks — Bank of America Merrill Lynch, Barclays, Credit Suisse and Morgan Stanley — have begun production on MarginSphere, AcadiaSoft's margin automation "community" in the OTC derivatives market. The new participants joined previously announced dealers Deutsche Bank, Goldman Sachs, HSBC and J.P. Morgan, bringing the majority of Fed-14 banks onto MarginSphere. (The "Fed 14" are the 14 banks the Federal Reserve criticized in 2005 for having inefficient trade processing practices.)
"The addition of four more of the world's leading investment banks to MarginSphere ensures that buy-side participants that join the community can now have the majority of their margin calls automated," said Craig Welch, co-founder and CEO of AcadiaSoft. "With greater attention on collateral management due to heightened regulatory oversight, it is now essential for firms to create efficiencies and increase transparency through automation of their margin call and collateral management operations. By bringing
such a large percentage of the OTC market on to MarginSphere, AcadiaSoft is offering a means to improve how clients manage these processes."
MarginSphere is a central messaging service that provides electronic exchange of margin calls, substitutions and interest statements between counterparties engaged in collateral management. MarginSphere was developed through coordinated efforts between AcadiaSoft and several banks.
The software provides dealers and investors with tools to manage all aspects of collateral communications online, letting parties that manage collateral agreements access information instantaneously. Users may view their collateral exposures and
commitments and make adjustments as needed. All activity is time stamped, and an audit trail of activity is created, satisfying existing regulatory requirements.