Increasing numbers of the Depository Trust & Clearing Corporation’s (DTCC) clients are opting to automate their margin calls through its Margin Transit Utility (MTU), with 50 firms now on board.
The community of users representing thousands of Credit Support Annexes (CSAs), with and includes dealer and buy-side organisations around the globe.
DTCC says its MTU was created to improve settlement efficiency and reduce operational complexity and risk for collateral call processing.
The service includes connectivity from AcadiaSoft’s Margin Manager and connectivity to a number of complementary collateral offerings, including CloudMargin, VERMEG’s (formerly Lombard Risk) Colline platform and TriOptima (triResolve Margin).
As the markets have experienced unprecedented increases in volatility and margin call demands, coupled with the final looming phases of Uncleared Margin Rules (UMR) rules for over-the-counter (OTC) derivatives, an increasing number of firms are actively looking to replace manual margin call processes with automation.
By automating the margin call process, MTU enables firms to efficiently validate, enrich, settle, report and monitor matched collateral calls globally while connecting to and sharing information with multiple counterparties, says DTCC.
“MTU aims to deliver a streamlined margin settlement process, automating key processes with our counterparties,” says Rob Marro, executive director at Morgan Stanley. “Through broader MTU participation we expect this to be integral to our ability to improve efficiency and remove complexity in tying the margin call to the settlement process and speeding reconciliations.”
One of the first participants to join the MTU community was Franklin Templeton and its director of global trade services, Krzysztof Wierzchowski, says the solution has “not only enabled us to meet the challenges of today, reducing risk and increasing efficiency at a time of uncertainty, but also positions us well to meet the regulatory demands of tomorrow”.
Elsewhere, John Straley, executive director, institutional trade processing at DTCC adds: “As a critical market infrastructure provider, our objective is to help firms efficiently comply with upcoming regulation while alleviating the pressures that spikes in margin call volume can bring, especially during today’s volatile markets.”
The growth in MTU users comes shortly after DTCC revealed that it had seen an 80 percent increase in the number of clients signed-up for its SFTR service via GTR since the beginning of the year, bringing the number of prospective users to 250.
The SFTR-focused solution builds upon a series of collaborations between DTCC and TriOptima that began in 2008.
Previous joint-projects include TriOptima’s triResolve repository reconciliation service building pipes with DTCC in 2016 to facilitate the reconciling of data reported GTR by institutions regulated in Singapore, Australia and Hong Kong.
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