MarginNet

Bring Opposing Views Together.Monetise The Difference.

Currently operating as a Matched Principal broker for offsetting order flow between qualified counterparties. In formation: MarginNet SPC (Cayman), a structured credit facility using ring-fenced cells. Subject to approvals and onboarding.

Phase 1 (live): Matched Principal Broker • Phase 2 (in formation): MarginNet SPC — Structured Credit Facility

Start now See how it works

🟢 Phase 1 live: Matched PrincipalMarginNet🟠 Phase 2 (in formation): Structured Credit FacilityMarginNet📰 Europe Q4 SRT issuance €74bn (+48% YoY)AFME 📰 2023: record SRT issuance - Western Europe led; new entrants in US/Canada/CEEKPMG (2024)🟢 Phase 1 live: Matched PrincipalMarginNet🟠 Phase 2 (in formation): Structured Credit FacilityMarginNet📰 Europe Q4 SRT issuance €74bn (+48% YoY)AFME 📰 2023: record SRT issuance - Western Europe led; new entrants in US/Canada/CEEKPMG (2024)🟢 Phase 1 live: Matched PrincipalMarginNet🟠 Phase 2 (in formation): Structured Credit FacilityMarginNet📰 Europe Q4 SRT issuance €74bn (+48% YoY)AFME 📰 2023: record SRT issuance - Western Europe led; new entrants in US/Canada/CEEKPMG (2024)

Our Mission

MarginNet’s mission is to bring precision and performance to synthetic flow. By netting opposing exposures ahead of market execution and event-driven periods, we reduce friction, optimise margin usage, and return economic value directly to participants.

We have filed a patent covering the mechanism by which we create unique counterparty risk portfolios and externalise the contingent variation margin shortfall risk to a third-party guarantor.

Who's It For

MarginNet is built for institutional participants who need clean, fixed‑term access to portfolio financing over short‑dated periods.

For Banks

CET1 efficiency on matched flow

Balance-sheet capacity for more clients

Cleaner CCR profile, clearer pricing

Remain competitive amid private credit growth

For Funds

Access to additional liquidity sources in a market increasingly squeezed by regulation

Capacity and pricing protection — avoid leverage stress when alternatives dry up

Operational efficiency from an optimal funding solution, without shifting positions to chase terms

Private Credit & Institutional Investors

Access to alternative investments that would otherwise be inaccessible

Diversified first-to-default exposures aligned with institutional mandates

Capital-light participation without building trading desks or heavy infrastructure

Why Two Phases?

MarginNet evolves in two steps: building trust through matched principal trading, then scaling into a fully fledged structured credit facility that delivers capital efficiency.

Phase 1 — Matched Principal Broker

Match offsetting client flows at reference prices. Build trust, prove operational resilience, and establish transparency.

Phase 2 — Structured Credit Facility

Extend into tailored credit structures that align capital to first-to-default risk. Open participation to banks, funds, and institutional investors.

Why start with Phase 1?

MarginNet begins with matched principal trading because it addresses an immediate client need: certainty of execution, reduced friction, and proof of operational integrity.

This builds the foundation of trust and transparency that Phase 2 expands on. In practice, both phases share an almost identical physical settlement process, with a regulated broker managing movements between clients’ existing prime brokers — keeping all regulated activity within a single entity.

Highlights

Immediate client need: execution certainty and lower friction
Proves operational integrity and data transparency
Same settlement model later underpins Phase 2

Regulated Matching Broker

All regulated activity is performed within this entity, including coordination of position transfers between PBs when required.

Phase 1 Activity — Match client flow at reference prices (matched principal)

Cross long/short at reference; broker prepares and coordinates settlement between existing PBs.

Shared operational model in both phases:
Prime Broker (A) ↔ Regulated Broker ↔ Prime Broker (B)

Note: Phase 2 remains a net-position facility. Position transfer is used only when counterparties are with different primes.

Phase 1 (live): Matched Principal Broker

Matched Principal Trading

We match offsetting client flows at reference prices — Market on Open (MOO), Market on Close (MOC), or Volume‑Weighted Average Price (VWAP) — before the auction or pricing window begins. This reduces execution risk, lowers costs, and reduces slippage.

Offsetting Flow

Clients with opposing buy/sell intentions are paired.

Before Auction/Window

Matching occurs before the MOO/MOC/VWAP window opens.

Reference Price

Trades settle at the official reference‑price benchmark.

Reduced Costs

Clients avoid execution risk and save transaction costs.

Operational simplicity — one pre‑match replaces many orders
Scalable capacity — large blocks without impact
Anonymity — no market signaling
Benchmark integrity — guaranteed official fix

Learn about the facility

First‑to‑Default (FTD) framing

Why Phase 2: The Structured Credit Facility

Offsetting client trades leave the bank with *gap* exposure only if one counterparty defaults first. Phase 2 externalises that first‑to‑default (FTD) gap to dedicated credit sellers — aligning capital to the actual risk.

Fund A — Long

Single‑name equity TRS (Stock XYZ)

Notional: $100m
Margin: 1 month reset; daily VM; segregated IM

Offsetting flow

Market risk ≈ 0

FTD exposure only — Not two simultaneous defaults

Fund B — Short

Single‑name equity TRS (Stock XYZ)

Notional: $100m
Margin: 1 month reset; daily VM; segregated IM

Current Model

Net market risk ≈ 0, but the bank is forced to assign counterparty credit exposure across both clients when calculating regulatory capital requirements (SA-CCR, CVA). This treats the exposure as if two defaults could occur, rather than aligning to the first-to-default reality: only one counterparty may default first, creating a short-lived gap risk until the hedge is re-established.

Capital Impact & Mitigants

Higher than FTD gap

Capital held on both legs despite offset
Gap risk is transient and tied to first default
Capacity constrained by CET1 consumption
Banks are increasingly pushed into complex SRT transactions to offset inflated capital
Hedging disruption clause can cap losses in an FTD event

MarginNet Model

MarginNet creates credit structures that suit different types of credit sellers — from banks to private credit investors. Banks have the opportunity to restructure their risk into more capital-efficient credit structures that improve return on equity. Private credit participants gain access to the growing hedge fund financing market without needing to build costly infrastructure or onboarding frameworks.

Capital Efficiency & Market Access

Lower; calibrated

Tailored credit structures to suit different seller types (banks vs. private credit)
First-to-default risk externalised to credit participants
Banks hold only residual, risk-aligned capital
Greater balance-sheet efficiency and improved return on equity

Note: Capital is not zero — it is sized to the residual risks after FTD transfer (ops/legal, timing, basis).

Illustrative only. Actual treatment depends on counterparty type, jurisdiction, documentation, and supervisory guidance.

Phase 2 (in formation)

Turn Offsetting Risk Into Structured Credit

Ring-fenced SPC cells unify offsetting risk into a single structured credit stack. Initial margin is held with a tri-party custodian; gap risk is protected.

Credit structures providing gap-risk protection
Tri-party margin & segregated collateral
Ring-fenced cells for portfolio isolation
Capital-aware netting & improved margin efficiency

Learn about the facility

Ready To Explore a Strategic Collaboration?

We’re seeking aligned institutions, strategic investors, and credit guarantors interested in shaping the future of institutional netting.
If that resonates, we’d welcome a conversation.

MarginNet SPC (Cayman) is in formation; availability subject to regulatory approvals and onboarding. MarginNet does not provide investment advice. Executions occur with your selected brokers. Terms apply.