Bilateral collateral is on the table at Clearstream
10 March 2014 Luxembourg
Image: Shutterstock
Clearstream is rolling out a bilateral collateral management service which aims to strengthen the OTC processing capabilities of the ‘global liquidity hub’, the company’s integrated risk and liquidity management solution.
The full lifecycle of bilateral collateral management activity will now be supported via the hub, from credit support annex (CSA) review and administration, mark-to-market, margining, dispute management and portfolio reconciliation to payment and settlement follow-up and reporting.
The solution, named ‘OTC collateral’, is also aiming to help customers overcome collateral fragmentation and optimise allocation by enabling them to cover over-the-counter, triparty and central counterparty (CCP) exposures from a single collateral pool.
A statement from the firm said that this “unique optimisation opportunity” would be especially useful for derivative exposures, as customers are currently facing the challenge of managing two parallel streams of exposures for cleared and uncleared collateral trades.
Stefan Lepp, head of global securities financing and member of the executive board of Clearstream, said: “Our bilateral collateral management service OTC collateral is an important expansion of the global liquidity hub and will strengthen our offering to banks and the buyside in line with the growing demand in the OTC derivative space."
"Its seamless connection to the triparty world via a range of reuse possibilities will enable customers to meet all their exposures from a single collateral pool, regardless of whether they are bilateral, triparty or to a CCP.”
The full lifecycle of bilateral collateral management activity will now be supported via the hub, from credit support annex (CSA) review and administration, mark-to-market, margining, dispute management and portfolio reconciliation to payment and settlement follow-up and reporting.
The solution, named ‘OTC collateral’, is also aiming to help customers overcome collateral fragmentation and optimise allocation by enabling them to cover over-the-counter, triparty and central counterparty (CCP) exposures from a single collateral pool.
A statement from the firm said that this “unique optimisation opportunity” would be especially useful for derivative exposures, as customers are currently facing the challenge of managing two parallel streams of exposures for cleared and uncleared collateral trades.
Stefan Lepp, head of global securities financing and member of the executive board of Clearstream, said: “Our bilateral collateral management service OTC collateral is an important expansion of the global liquidity hub and will strengthen our offering to banks and the buyside in line with the growing demand in the OTC derivative space."
"Its seamless connection to the triparty world via a range of reuse possibilities will enable customers to meet all their exposures from a single collateral pool, regardless of whether they are bilateral, triparty or to a CCP.”
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