New FINRA 4210 Margin Requirements – What Do Firms Need to Know?

Following eight years of delay and postponement, the ‘4210’ rules finally come into effect 22 May 2024. In-scope firms with covered agency transactions, including To Be Announced (TBAs), pool transactions & Collateral Mortgage Obligations (CMOs) will become subject to daily margin requirements (or equivalent capital deductions).


What should firms focus on?

While immediate priority should be given to establishing and updating legal Master Securities Forward Transaction Agreement (MSFTA) documentation, the broader challenge is to establish the BAU processes to correctly identify in-scope trades, perform daily MTM valuations and manage margin exchange (or capital deductions).


How can OSTTRA help?

Ahead of the regulatory go-live, firms are already using our services to manage both reconciliation and margining of their MSFTA portfolios.

OSTTRA triResolve provides an automated way to align portfolios & resolve differences. We reconcile over 90% of all bilateral OTC derivatives across 2,000+ groups. You benefit from a centralised service model with a global network where you and your counterparties share the same view and work together to resolve any differences.



OSTTRA triResolve Margin leverages the portfolio reconciliation data and automates the margin call exchange & collateral settlement process.


Standardisation & Optimisation

Simplifies data capture & normalisation, supports data quality checks and provides best-practice workflows across products.

Cost Effective

Our transparent pricing model is pay as you go with no hidden fees.

Rapid onboarding

No installation required. Be up and testing in days.

Operational efficiencies

Retire manual processes – reducing operating costs and allowing you to focus resources on risk & compliance.

Robust dispute resolution

Reconciliation analytics pinpoint where you have disputes and identifies what is driving them.

Multiproduct coverage

Multi asset class and product support including Bilateral, Cleared, ETD, Repo and TBA.


To find out more about our Margin solutions, contact us below.

Margin Management Success Stories

Read how our clients are using our complete margin management solutions.

2024 Outlook for Collateral Managers

Looking ahead at the calendar of global events, 2024 is shaping up to be quite a big year. Elections in more than 20 countries, not least in the UK, US & India; ongoing geopolitical tensions and war; plus on the sporting front, the return of the Olympics to Paris for first time in 100 years. With all that going on, the world of collateral management might seem a little more prosaic!
Neil Murphy, Business Manager at OSTTRA considers the key focus areas for Collateral Managers in 2024.



Eight years since the introduction of mandatory requirements for non-cleared derivatives (Uncleared Margin Rules, or ‘UMR’), firms both big and small face continued efforts to navigate UMR impacts, particularly related to the monitoring of entities not yet in-scope and IM documentation. In addition, 2024 heralds the introduction of additional UMR requirements in new jurisdictions (including Mexico and India), bringing firms into scope not only in these countries, but also potentially impacting their counterparts around the world. To assess the impact, firms must adhere to AANA (Average Aggregated Notional Amount) calculation windows (March – May) to evaluate newly impacted entities and liaise with counterparties to understand the corresponding impact. Further, this may create an on-going requirement for new legal documentation and custody arrangements.

OSTTRA triResolve Margin: Preparing to Exchange IM

FINRA 4210 rules for margining of TBA trades have been repeatedly delayed since 2016, but firms finally now have a May 2024 deadline for which to prepare. And while the introduction of margin requirements on these trades may seem like just another asset class, the rules contain a unique set of characteristics, including the potential to waive margin exchange in lieu of additional capital charges.

In terms of transaction reporting, 2024 will be a crucial year marked by noteworthy changes across several jurisdictions (EU/UK EMIR Refit; CFTC Rewrite; JFSA Rewrite; ASIC/MAS updates). Given the global aspect of these changes, most OTC derivatives users will find themselves effected, and priority should be given to understanding new requirements and necessary changes to both reporting & validation. Key changes require reporting of new fields (taking the number to more than 200!); additional standardisation via adoption of the ISO 20022 standard; the introduction of Unique Product Identifiers and a move away from file upload to use of XML. For firms who delegate reporting, while the rules don’t alter the obligation, the scope of the upcoming changes means firms should seek to evaluate that their reporting party is able to comply, given that they remain liable for reporting.

Process improvements

Winston Churchill may not be the obvious guru for Collateral Managers, however his observation that ‘to improve is to change; to be perfect is to change often’ sounds like sage advice. Whether the driver for change is regulation; organic business growth or cost savings, 2024 should see firms focus their attention on improving existing operational processes, as well as laying the foundation to support new initiatives.

“To improve is to change; to be perfect is to change often”
Winston Churchill

While UMR has been a key driver of increased workloads in recent years, both in terms of project delivery and creation of an operational framework, it is likely to continue to occupy the minds, and time, of Collateral Managers. For those firms who have so far taken the ‘lighter’ route of IM monitoring, they may find themselves approaching IM thresholds, and hence may need to improve operational capacity to manage the margining, settlement and reconciliation of Initial Margin. And even those more mature firms with robust IM capacity may find themselves stretched by additional volumes, necessitating further investment in workflow automation and triparty connectivity. For firms who chose to reduce the impact of UMR by outsourcing the day-to-day management of IM requirements, many are now reviewing that and determining whether the time is right to bring in-house.

Recognising the ongoing UMR challenge, a recent BCBS-IOSCO paper recommended that ‘firms should ensure that existing UMR frameworks expand as existing Initial Margin exposure increases, potentially forcing firms to move from a low effort ‘monitoring’ approach to a more resource intense (and costly) exchange of Initial Margin’.

“firms should ensure that existing UMR frameworks expand as existing Initial Margin exposure increases, potentially forcing firms to move from a low effort ‘monitoring’ approach to a more resource intense (and costly) exchange of Initial Margin” 

The same paper also proposed recommendations to ‘encourage more widespread automation and standardisation of the margining operational processes and highlight the need for proper operational risk management’. For many, such improvements should focus on improved use of electronic messaging for margin call exchange, thus reducing time and efforts, plus improving the end to process, particularly around collateral settlement and dispute resolution.

While much of the market focus has been on improvements for OTC margining, firms should now leverage these same tools to bring efficiencies across Cleared, Repo and ETD products. Case in point is exchange traded products, with more than 130 billion contracts traded in 2023, doubling in just two years. A focus on adoption of industry standards (systems; protocols; processes etc.), can help facilitate synergies across products, further allowing firms to manage risks centrally and reduce overall costs.


Technology upgrade

Improved technology is central to helping firms meet their requirements around regulatory change and operational improvements. While some firms used UMR as an opportunity for system upgrade and renewal, others took a ‘wait and see’ approach. Given the current trend for increased automation, a potential need for ongoing regulatory tweaks – combined with moves to consolidate margin processing onto a single platform – and that previous investment is now looking like money well spent.

SWIFT automation for Collateral Managers

Key areas of focus are leverage of cloud capability and shared use of network infrastructures to reduce cost and quickly help firms achieve industry best-practice. Infrastructure improvements across the collateral lifecycle can help firms leverage automation to meet increasing volumes and operate within shorter time windows.


An impact of regulation can be to increase both capital and liquidity costs. While rising interest rates make the use of cash collateral increasingly more expensive. The net impact is that more and more firms are considering how optimisation can be used to combat these increases.

The goal of optimisation may be different for each organisation, so firms need to work across Risk, Front Office and Operations to determine the most appropriate optimisation objectives for their firm. Some may choose to focus on minimising capital costs (SA-CCR; RWA etc), while others prioritise operational efficiency or reduced funding cost (SIMM; CCP IM etc.) – while for others a multi-function approach may be necessary. Pre-trade optimisation capabilities may be used to help firms select the optimal trading venue or counterparty, while a post-trade strategy may assist firms to offset risk through compression or offsetting trades, or lower funding cost by selection of cheaper collateral assets.

Capital and liquidity optimisation require complex processing and are often applied in a real-time environment hence some firms may determine the pay-off is not yet sufficient. This doesn’t mean they should disregard optimisation entirely. Instead they should focus on operational optimisation, improving processes to minimise manual efforts and deliver the highest levels of STP.



How firms balance the above challenges will vary based on their individual starting point; budget; Front Office/regulatory focus and technology capability. OSTTRA is helping firms address these challenges every day. In 2023 we saw record adoption across new asset classes, as firms focus on centralised processing for Cleared, Repo and ETD products. Similarly, we see more and more firms embracing cloud and automation to manage their end-to-end collateral business, while the optimisation conundrum continues to drive client conversations.

Given this year is also marked by the first US-crewed mission to the moon in more than 50 years, perhaps the question for Collateral Managers is, ‘will they take a small step, or a giant leap in 2024’?

XVA at the Forefront: Addressing Key Financial Challenges

Dai Yamashita, Post-Trade Quantitative Research & Development Manager at OSTTRA, guides us through the dynamic landscape of XVA, focusing on key themes that currently resonate within our customer base.

Archegos crisis and recognition of the importance of XVA

In recent years, significant loss incidents such as the Archegos crisis have fuelled growing interest in XVA among various financial institutions. Notably, the function of XVA desks and their role in counterparty risk management has become increasingly vital.

For accounting purposes, mid-sized financial institutions have been required to implement CVA by regulators and auditors. The introduction of CVA into accounting has increased the interest of management and created pressure to consider CVA in pricing and risk management. We are aware of the increasing need for calculations in Front Office and Risk Management at those institutions, such as CVA sensitivity calculations and pre-deal CVA simulations.

Through our market-leading collateral management platforms OSTTRA triResolve and triResolve Margin, we have observed that a wide range of financial institutions are becoming increasingly aware of the significance of CSA terms for CVA in collateralised trades.

OSTTRA tricalculate xva case study link



Financial institutions, including non-G-SIB regional banks, that have established XVA desks are actively managing XVA according to their business characteristics. For example, the migration from CEM to SA-CCR could motivate a wide range of banks to start managing KVA based on SA-CCR to prepare for the increased capital cost on short-term transactions.

From a macro perspective, CVA has long been a concern for authorities due to the adverse selection problem, where the systemic risk arises from CVA-unfavourable trades being concentrated in financial institutions lacking proper CVA management. A similar mechanism applies to KVA as well. There is a risk that transactions unfavourable in terms of cost of capital may become concentrated in institutions that do not actively manage KVA, leading to a widening gap in capital cost performance. Consequently, we anticipate that KVA will increasingly become a growing concern for an even broader range of financial institutions in the future.

Benchmark Reform and FVA

Benchmark Reform, including the finalisation of the LIBOR part in June 2023, could also have implications for XVA. If the LIBOR discount was previously applied to uncollateralised trades before the Benchmark Reform, the application of the OIS discount as a result of the Benchmark Reform will lead to a smaller difference in the valuation treatment between uncollateralised and collateralised trades. This has increased the importance for a wide range of financial institutions to properly consider the funding costs/benefits of uncollateralised trades through FVA.

Basel III

Regarding the finalisation of Basel III, SA-CVA is likely to be a significant topic of discussion. While there may be reasonable hurdles, such as the need to establish a CVA desk and obtain approval from authorities, it is expected to be more effective in reducing RWAs by hedging credit risk using a proxy or hedging market risk. Moreover, the impact of collateral can be directly considered in the exposure simulation, further enhancing the effectiveness of reduction efforts. This presents an excellent opportunity for financial institutions to begin managing CVA within the CVA desk framework.

As an example, our OSTTRA triCalculate XVA engine not only supports XVA sensitivities but is also optimised for performance using GPU utilisation, enabling us to overcome performance challenges. With this capability, we aim to assist financial institutions seeking to reduce RWAs through SA-CVA in the future.

UMR, MVA and collateral modelling

Another recent regulatory change is the implementation of Phase 6 of the UMR in September 2022. Alongside the initiation of Phase 5 in 2021, a significant number of financial institutions worldwide have come under IM regulations, making IM exchange for interbank transactions even more common.

From an XVA perspective, it now becomes more essential to consider the impact of future IM in both CVA and MVA calculations.

Depending on the calculation approach, this may involve computing SIMM sensitivities at future simulation dates, which can be computationally intensive and equivalent to MVA in terms of complexity. However, in our case, OSTTRA triCalculate provides a SIMM calculation engine alongside the XVA engine, which has been widely adopted by many financial institutions globally. We can effectively leverage the SIMM engine to perform accurate and up-to-date SIMM computations in MVA/CVA calculations. This ensures a comprehensive and robust assessment of the implications of future IM in XVA considerations.

Furthermore, in response to the evolution of IM regulations, there has been a standardisation of margin conventions that consider both IM and VM IA (Independent Amount). As a comprehensive provider of collateral management-related platforms, OSTTRA remains constantly updated with the latest developments in these areas and incorporates them into our XVA calculations as required.

Regarding collateral treatment, although there has been a general trend preferring “clean CSA”, where cash collateral is posted in the currency of the underlying trade, there is still considerable demand for handling various types of collateral posting. As a response to our clients’ needs, OSTTRA triCalculate has recently enhanced its collateral handling capabilities and upgraded the ColVA calculation accordingly, ensuring flexibility and adaptability to different collateral requirements.



User-friendly and holistic calculation service

From our perspective as a provider of XVA calculation services, we understand the increasing benefits of performing various derivatives-related calculations in an integrated manner. The ability to conduct multiple calculations from a unified interface, efficiently and cohesively, brings significant advantages. For example, performing SIMM calculations at future simulation dates within MVA/CVA computations or addressing the need for SA-CCR calculation in CCR KVA using the same interface as the spot SIMM/SA-CCR calculations proves highly advantageous.

We aim to meet the varied calculation requirements of our clients through a comprehensive approach. By considering this aspect and focusing on usability optimisation, we strive to offer a solution that streamlines the process and enhances overall performance. Our goal is to provide a user-friendly and effective platform that caters to the evolving needs of our clients in the realm of derivatives-related calculations.


To find out more, talk to a member of our team at


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Regulatory IM collateral segregation and the choice of triparty versus third-party

While the need to calculate and post Initial Margin grabs the headlines, so to speak, in terms of priorities for firms looking to comply with uncleared margin rules (UMR), there are many other issues for firms to consider.

Not least is the requirement that Initial Margin (IM) is segregated in a bankruptcy remote account.  Firms coming into scope and obliged to exchange IM, must work out HOW they will segregate collateral.  The fact that many of these firms will be using non-cash collateral for the first time adds to the challenge.

There are two segregation structures in play today: triparty and third-party, and there are multiple factors to consider before deciding what’s best for a firm.  This choice impacts the new legal documentation to be put in place, including clauses in the Account Control Agreement with each custodian, as well as new ISDA Credit Support documentation with each counterparty.  It also has direct consequences on a firm’s operational model.

For many firms coming into scope in phase 5/6 of the rules, the triparty model is an entirely new process given the wider reliance on the traditional custody model.  For those not currently utilizing a segregation model for collateral held as Variation Margin (VM),this may mean a steep learning curve, and you must weigh the relative cost vs. operational process requirements of each model.


Triparty structures are generally more expensive than third party structures. This is because in the triparty model the custodian provides a broader range of services, taking on more of the operational process on behalf of the client.

Clients must each maintain a ‘long box’ of potential collateral at the triparty custodian.  Upon agreement of the IM margin call, each party must instruct the custodian of the RQV (required collateral balance).  This contrasts with traditional VM settlement, where each party will also agree the collateral to be pledged before instructing the custodian.

Upon receipt of the RQV, the custodian will check the existing balance of the segregated account, look in the pledgor’s long box to see available securities and determine which securities in the long box are eligible to be pledged for this agreement, before calculating how much collateral must be moved to get to the required balance.

It will then move/settle the appropriate collateral to the segregated account. In this case, the triparty custodian selects the asset to pledge, applies a haircut and calculates the collateral value.  It may also provide optimization services to provide the best use of a client’s long box, as well as perform collateral substitutions on the client’s behalf.


Third-party structures are generally less expensive because they require clients to ‘own’ more of the operational workflow steps involved in collateral selection and settlement.  Under the third-party structure, firms and their counterparties must first agree the IM call amount and then the collateral to be pledged, before instructing settlement to the custodian.

In other words, when firms use a third-party custodian they are responsible for calculating the amount of additional collateral required, selecting an asset, verifying collateral eligibility, applying haircuts, valuing collateral, performing optimization, managing substitutions and instructing settlement to the custodian. This is the same process that would be used to post securities if the collateral was not segregated.

What to do?

If you are using a third-party structure today for segregation of Variation Margin or Independent Amount, you likely already have a process in place to support non-cash collateral. Your experience with these processes, as well as your relationship(s) with existing custodian(s), may make a third-party model a natural choice. However, if you are only using cash collateral today, the additional operational requirements brought about to segregate non-cash collateral may seem unattainable in a short timeframe.  Firms need to clearly understand each model and assess not only their operational capacity, but systems capability too. The challenge of meeting an entirely new collateral segregation process using legacy technology – which was probably built long before the requirement to exchange Initial Margin evolved – must not be overlooked.


To learn more about Collateral Management, click here or contact us at

2023 Outlook for Collateral Managers

Collateral Managers have been balancing busy ‘to do’ lists in recent years. Much of this was derived from global Uncleared Margin Rules (UMR) which introduced new requirements to calculate and post Initial Margin (IM) and have occupied the OTC derivatives market since 2016. Following the passing of the last UMR phase in September 2022, many may have been looking forward to calmer times.


Unfortunately that may not be the case!

While some firms took the opportunity to completely revamp their collateral systems and processes as part of their UMR preparations, others either adopted a narrow UMR-specific focus or kicked the can down the road entirely.  For firms in the last two groups, there’s nothing potentially ‘wrong’ with either approach, since regulatory relief allowed phase 5/6 firms to defer some key UMR preparation steps where certain criteria were met.  However, in doing so firms potentially didn’t take the opportunity brought by regulatory change for an extensive end-to-end review of their collateral setup, across uncleared, cleared & exchange traded. The result – many firms still follow legacy processes, run multiple systems to margin separate products, lack connectivity to industry utilities and have low (or zero!) levels of automation.

For firms already in-scope for UMR – regardless of the path they’ve taken to date – and for those firms not yet in-scope, several areas stand out where Collateral Managers should focus their attention in 2023.

Update processes

Organisations need to evolve – ensuring their operational processes are updated to meet new and changing business needs – while also keeping up to date with wider industry standards. For Collateral Managers, this means use of robust workflow tools which allow real-time processing and drill down into margin calls, disputes and settlements.

Firms should implement integrated workflows that ensure operational flows are logical and scalable – while providing easy access to data, both current and historic, ensuring high levels of transparency for management and audit.

In addition, firms should look to implement the same standards whether processing bilateral OTC derivatives, Cleared, Repo or ETD.  Moving from siloed processing of individual products will allow the transition to a single cross-product margin workflow.

Improve automation

Regardless of size, all firms should be looking to leverage automation. This removes the need for teams to perform low value-add tasks (e.g. manually sending margin calls), supports increased business growth & scalability, reduces costs, and enables straight-through processing.

Manual tasks also give rise to increased operational risk, so a focus on automating these areas can also help reduce errors.

Improved automation shouldn’t focus only on the margin call process, but the entire collateral lifecycle; from data capture to dispute resolution and settlement.

In a rising interest rate environment where firms may be looking to use bond collateral to reduce costs, they should automate all related tasks, including asset optimisation, pricing and substitution. Overall, firms should be moving towards an exceptions-based approach – where time & resources are focused more on resolution of risk related issues, and not operational processing.

Leverage technology

Adoption of the latest available margin technology will allow firms to achieve automation and best-practice processing, as well as enabling the transition to a single cross-product solution. Firms using outdated systems – whether built internally or installed vendor solutions – should benchmark their requirements versus latest industry tools, and many will identify an opportunity for significant benefits.

Cloud-based offerings provide firms with access to up-to-date features, removing both the need for upgrades and infrastructure hosting costs.

Similarly, many offer out of the box connectivity to industry utilities and counterparties, including Acadia electronic messaging; triResolve portfolio reconciliation and SWIFT settlement.

Complete/improve UMR preparations

For firms who have implemented tactical UMR solutions, it is critical not to allow these to become embedded, potentially limiting the ability to manage IM, regardless of whether exchanging IM today or expecting only to do so in the future. Likewise, those firms who have chosen to defer some of the preparation steps must ensure that UMR readiness is not forgotten.

Firms should ensure they can calculate IM across all portfolios and asset classes, as well as having a robust solution to manage IM exposures. If they are monitoring IM today, then they should ensure they are prepared to move quickly as IM increases and be ready to sign IM documentation and implement a process to both collect and post collateral.  Crucially they must also ensure they can segregate collateral at either a triparty or 3rd party custodian, including the ability to instruct settlement via SWIFT.

This provides a starting point for those Collateral Managers thinking about 2023 priorities. When considering your own organisation, firms should target operational efficiency, reduced complexity and replacement of older IT systems. The gains that firms can hope to achieve include reduced settlement fails, improved dispute management, lower processing costs and adoption of industry best-practice (both for operations & technology).


To learn more about Collateral Management, click here or contact us at

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Webinar: Are you in scope for phase 5 or 6 of the Uncleared Margin Rules?

Plan ahead with our on-demand webinars

Listen to one of our on-demand webinars, run in partnership with and Asia Risk, and hear from panels of regional industry participants as they share best practices and recent experiences with UMR planning. They address the challenges firms face as they prepare to meet the upcoming September 2021 and 2022 deadlines and cover the key decisions firms need to make including:


EMEA/US: Navigating uncleared margin rules ‒ phases 5 and 6
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APAC: UMR compliance and effective collateral management for phase 5 and 6
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Establish a plan to implement effective UMR phase 6 compliance

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Useful Links:

IM Prep Guide

Article: Looking ahead to the last phase of UMR

Initial Margin Compliance

OSTTRA Clearing Connectivity