RBC to assist with collateral requirements
14 April 2015 Luxembourg
Image: Shutterstock
RBC Investor & Treasury Services, part of Royal Bank of Canada, has launched a solution to monitor and stress test collateral liquidity.
The solution has been designed to help firms comply with new collateral requirements as prescribed by the European Securities Markets Authority (ESMA).
The ESMA guidelines outline quantitative and qualitative criteria that the Undertakings for Collective Investments in Transferable Securities (UCITS) and UCITS exchange traded funds (ETFs) must meet when entering into over-the-counter (OTC) derivatives transactions and efficient portfolio management techniques.
The purpose of the requirements is to reinforce investor protection and transparency, mitigate counterparty risk and harmonise regulatory practices across Europe.
RBC Investor & Treasury Services’s Collateral Risk Report will provide assistance to clients by monitoring and measuring the eligibility and diversification of collateral received in relation to OTC transactions and efficient portfolio management techniques.
The tool will also provide liquidity stress testing whenever a fund’s aggregated collateral exceeds 30 percent of the fund’s net asset value, in accordance with the ESMA Guidelines.
Joanna Meager, global head of client operations and head of RBC Investor & Treasury Services UK, said: “New regulations are driving clients to reconsider the way they manage their collateral and associated reporting processes.”
“Our Collateral Risk Report helps users to meet these evolving requirements while optimising operational efficiency, mitigating risks and reducing costs.”
The solution has been designed to help firms comply with new collateral requirements as prescribed by the European Securities Markets Authority (ESMA).
The ESMA guidelines outline quantitative and qualitative criteria that the Undertakings for Collective Investments in Transferable Securities (UCITS) and UCITS exchange traded funds (ETFs) must meet when entering into over-the-counter (OTC) derivatives transactions and efficient portfolio management techniques.
The purpose of the requirements is to reinforce investor protection and transparency, mitigate counterparty risk and harmonise regulatory practices across Europe.
RBC Investor & Treasury Services’s Collateral Risk Report will provide assistance to clients by monitoring and measuring the eligibility and diversification of collateral received in relation to OTC transactions and efficient portfolio management techniques.
The tool will also provide liquidity stress testing whenever a fund’s aggregated collateral exceeds 30 percent of the fund’s net asset value, in accordance with the ESMA Guidelines.
Joanna Meager, global head of client operations and head of RBC Investor & Treasury Services UK, said: “New regulations are driving clients to reconsider the way they manage their collateral and associated reporting processes.”
“Our Collateral Risk Report helps users to meet these evolving requirements while optimising operational efficiency, mitigating risks and reducing costs.”
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