Nationwide selects BNP Paribas for collateral management services
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Nationwide selects BNP Paribas for collateral management services 13 October 2021France Reporter: Maddie Saghir
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BNP Paribas Securities Services has won a mandate to provide Nationwide Building Society with triparty collateral management and global custody services for its non-UK assets.
The triparty collateral management services will help Nationwide meet its obligations under Wave 5 of the initial margin rules, which requires financial institutions to post collateral to back up their non-cleared over the counter derivatives trades in order to mitigate counterparty risk.
Meanwhile, settlement and custody services will be provided for Nationwide’s non-UK assets. This is in addition to the mandate to safekeep Nationwide’s UK assets, which BNP Paribas Securities Services won in 2016.
In total, BNP Paribas Securities Services now provides Nationwide with global custody services representing circa GBP 20 billion in UK and non-UK assets.
Paul Gould, head of operations and strategic development at Nationwide Building Society, says: “BNP Paribas Securities Services’ extensive custody network and triparty collateral management services will help us manage our assets efficiently across all the markets in which we operate.”
Graham Ray, global head of relationship management and sales for banks and brokers at BNP Paribas Securities Services, comments: “Using our triparty collateral management services and extensive custody network, Nationwide will be able to mobilise collateral quickly and securely, when and where it is needed. We look forward to continuing our partnership with Nationwide going forward.”
Elsewhere, BNP Paribas Securities Services has revealed that its triparty collateral management service can now support synthetic securitisation and collateralised note structures, bringing greater operational efficiency and protection to those structures.
Launched in 2017, BNP Paribas Securities Services’ triparty collateral management service, connects financial market participants, facilitating the circulation of assets and expanding the range of securities that can be used to back up securities financing and derivatives trades.
According to BNP Paribas, its triparty collateral management service will enable the proceeds of notes issuance to be transformed through securities finance transactions, or a cash loan secured with securities, efficiently and safely.
This use of triparty collateral management is already being used to manage the collateral aspects of the repo associated with BNP Paribas’ Resonance 5 synthetic transaction.
As a neutral triparty collateral agent, BNP Paribas Securities Services can manage the collateral management process on behalf of the two parties to a transaction and protect the interests of Special Purpose Vehicles throughout the collateral management process.
Services include selecting collateral in accordance with eligibility rules, transferring collateral on a near real-time basis; and valuing collateral assets.
The bank explained that it can also manage margin calls, substitution in case of a recall of the securities and corporate actions.
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