Quantile enables the buy-side to reduce margin costs and mitigate the impact of the uncleared margin rules.


Quantile’s Counterparty Risk Optimisation service enables buy-side firms to reduce margin costs and mitigate the impact of the uncleared margin rules in FX and interest rate runs. 


Quantile, a leading provider of multilateral optimisation services, today announced that its counterparty risk optimisation service is enabling buy-side firms to reduce the cost of funding initial margin and mitigate the impact of the uncleared margin rules (UMR).

September saw over 750 buy-side firms come into scope for the uncleared margin rules, and recent analysis by Acadia has shown that last year’s recalibration of the standard initial margin model (SIMM) has increased margin requirements by a third*. With more participants now in-scope and facing rapidly rising funding costs, Quantile is seeing increased demand for its optimisation services as buy-side firms look to control their initial margin exposures and unlock valuable trading capital so they can continue to maximise returns for their clients.

Quantile’s award-winning service enables participants to optimise cleared and uncleared margin, and capital requirements under SA-CCR simultaneously in FX and interest rate runs. The rapid 5-hour process analyses the risk of transactions across the network and rebalances portfolios with new market risk neutral trades that reduce counterparty risk and release capital. Quantile is renowned for delivering record-breaking margin reduction, often in excess of 50%, and boasts an extensive network including all the top tier global banks, regional banks and buy-side firms.

Responding to the buy-side’s desire for highly automated solutions, Quantile has developed API infrastructure to streamline workflows and deliver improved operational efficiency. Quantile is now able to offer this to all its clients, which is expected to accelerate adoption of the service and attract additional buy-side participants.

Quantile continues to evolve to help firms mitigate the impact of the uncleared margin rules, and earlier this year launched margin threshold management – a tool which enables participants to manage their UMR thresholds.

Andrew Williams, Chief Executive Officer, at Quantile commented: “Supporting the buy-side is a key priority for Quantile and we are focused on expanding our network so more participants can materially reduce their margin requirements and counterparty risk at a time where reducing costs is critical. We pride ourselves on our agility and ability to respond to client requirements – and the enhancements delivered specifically for the buy-side will enable us to rapidly onboard additional firms and deliver greater efficiency.”


In addition to counterparty risk optimisation, Quantile also offers a market leading interest rate compression service which enables participants to reduce gross notional and trade count and delivers multiple secondary benefits including aiding the transition from USD LIBOR to risk-free rates.


* https://www.risk.net/derivatives/7954251/margin-costs-leap-on-simm-rejig-and-rates-hikes

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