Acadia and Capitolis Unveil Optimisation Service

Risk management technology provider Acadia, and optimisation technology provider Capitolis, have launched SA-CCR Optimization, a service the firms say will bring considerable cost savings to firms subject to the Standard Approach to Counterparty Credit Risk (SA-CCR) regulations, focusing on specific FX products such as FX forwards, options, deliverable swaps and cross-currency swaps.

With SA-CCR Optimization, banks and participating financial institutions provide trade data, which Acadia and Capitolis process and use to generate a series of FX transactions that reduce capital requirements, leaving each client’s net FX risk profile largely unchanged.

SA-CCR requirements for financial institutions based in some parts of Europe went into effect in June 2021, while regulations in the United States are set to be implemented on January 1, 2022.

“The newest wave of capital regulation is pushing firms to be more mindful of capital consumption across their businesses,” says Chris Walsh, CEO of Acadia. “SA-CCR Optimization is an opportunity for them to reduce consumption levels and deploy their capital in a more efficient manner. We are thrilled to provide clients with a dynamic infrastructure solution to compress trades and significantly reduce capital consumption, building upon our data analytics with Capitolis’ market-leading optimisation platform.”

The launch of SA-CCR Optimization deepens the partnership between the two firms, who unveiled a link up earlier this year, combining as it does, Acadia’s risk analytics and margin data platforms and Capitolis’ proprietary technology, allowing for greater capital optimisation for financial institutions.

“Our continued integration with Acadia’s trusted platform is an effective solution for our clients to maximise efficiency in SA-CCR balance sheet optimisation,” says Gil Mandelzis, CEO and founder of Capitolis. “Our partnership will also position the industry for success in multilateral optimisation of SA-CCR.”