Asia Pacific institutions turn to portfolio reconciliation ahead of regulatory changes

British markets operator and provider of post trade risk mitigation and information services has recently placed an emphasis on impending regulatory changes in Asia Pacific (APAC) have prompted leading financial institutions to proactively reconcile their portfolios and manage their collateral disputes.

The group owns several commercial divisions which specialize in certain aspects of electronic order flow, with this particular revelation having eminated from TriOptima, ICAP’s OTC derivative post trade services operation.

TriOptima reports that 78 firms in APAC are proactively using its triResolve portfolio reconciliation service, in anticipation of regional regulatory changes. The number of firms using triResolve has grown 350% since 2012.

Market participants have begun to reconcile regularly to accommodate their US and European counterparties who are required to reconcile their portfolios and manage their collateral disputes in a timely manner. Proactive portfolio reconciliation is an important risk management tool that many firms are adopting as best practice.

“Although we are not currently required by our regulations to reconcile our portfolios, we find it to be best practice and very efficient,” said Brendan Byrne, Head of Collateral Management and OTC Reform at Suncorp Bank in Australia. “triResolve is the perfect tool to manage this process especially since all of our counterparties are using the service already. It also assists our counterparties with their regulatory obligations, particularly in Europe and the US.”

triResolve users in APAC cover a wide range of customer types including banks, insurance companies, securities firms, energy companies, hedge funds, investment managers, and sovereign wealth funds and government treasuries in Australia, Kong, Japan, Singapore, South Korea and Taiwan. Indeed, Singapore has major influence in terms of institutional and bank trading, being the largest institutional FX center in Asia.

“We see significant potential for more growth in the region as regulators continue to collaborate with IOSCO on setting risk mitigation standards,” said Yutaka Imanishi, CEO of TriOptima Asia Pacific. “The introduction of two-way variation margin in 2015 will necessitate firms adopt a robust reconciliation and dispute resolution process like that offered by triResolve.”

For the full announcement from ICAP, click here.

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