Margin and collateral network "MarcoNet"
|Coordinator||Envirio Consulting AB|
|Funding from Vinnova||SEK 1 912 500|
|Project duration||August 2019 - August 2020|
|Venture||Collaboration projects in cybersecurity and digital infrastructure|
|Call||Cybersecurity and reliability - Theme: Identity and block chains|
Purpose and goal
Pension schemes are exempt from the European Market Infrastructure Regulation (EMIR) since 2012. The exempt will expire during coming years. Then, it will be required to provide collateral for more types of transactions. In 2015, the European Commission estimated the additional cost for Swedish retirees to be ~200 million euro per year with current infrastructure. If pension schemes can provide securities as collateral, cost will be minimised. The project will demonstrate a blockchain based infrastructure that makes it as easy to use securities as cash as collateral.
Expected results and effects
The solution that the project will demonstrate targets the process that starts with a margin call from a central counterparty (CCP) and ends with the margin call being met. Margin calls that today might be made on a weekly basis will be made intra-day, to be met within an hour using securities as collateral. A normal call should be met within minutes. With this, the financial stability sought with EMIR can be implemented with minimal cost to our collective savings for our retirement.
Planned approach and implementation
The project is split into three streams; technology, legal and business process. Technology development utilises Agile methods and will constitute two releases based on six sprints each, all delivered within six months. Security and reliability are basic requirements for financial infrastructure and will constitute a major part of the work. Legal matters is a separate stream based common European legislation. Business processes will be developed in collaboration with actors in the market to ensure a broad acceptance of the solution.