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Foreign Exchange

Anvil pioneers multi-asset margining tool

Global consultancy and software provider Anvil has seized the opportunity to become the first company to design a cross-asset margining tool. In essence, the new system, dubbed Anvil Margin, will help traders, middle offices and back offices to manage collateral more effectively by operating on a multi-asset class basis. "This new product has been driven by emerging trends in the industry," says Phil Buck, CEO of North America at Anvil. "Market participants are becoming far more focused on cross-asset margining, for the simple reason that it's more efficient."

Margin trading of, say, FX products has traditionally been agreed on a separate pool of collateral to swaps products being traded at the same organization. The differing legal frameworks attached to each product have in part fuelled this siloed or vertical arrangement. For instance, FX products are transacted under IFEMA (International Foreign Exchange Master Agreement) terms while swaps operate under the legal framework designed by the International Swaps and Derivatives Association.

Anvil already provides a host of risk management products across the capital markets spectrum, including equities, bonds, FX, money markets, and derivatives. However, this latest product covers any margin calls across all asset classes and calculates exposures, monitors collateral already pledged and finds appropriate additional collateral from available long positions, thereby increasing the efficiency of trades.

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