ICE Clear Europe connects to Baton network
23 August 2021 US
Image: JFL_Photography/adobe.stock.com
ICE Clear Europe has linked to Baton Systems’ network, becoming the fifth CCP globally to connect.
These five clearing houses together account for over 73 per cent of margin posted by US-registered future commission merchants (FCMs), according to Baton.
The Baton network allows FCMs to automate and optimise collateral movements, while facilitating mobility of cash and securities between FCMs, custodians and other infrastructure entities connected to the platform.
According to Baton, this allows market participants to access central counterparty (CCP) account balances and acceptable collateral-lists on demand, along with the ability to view assets deposited with external custody banks and CCPs.
Citi was the first FCM to link to ICE Clear Europe using Baton connectivity.
Baton is working with ICE Group on a roll-out plan that is expected to link ICE Clear US and ICE Clear Credit to the Baton network in coming months.
Citi’s head of clearing for the Americas and global head of financial resource management for futures, clearing and FXPB, Mariam Rafi, says: “With Baton we have been able to accelerate our innovation agenda and drive efficiencies throughout our entire clearing process. Our collateral management team can now access information in real-time and dynamically manage our inventory of eligible collateral across the network of CCPs we interact with the most.”
J.Christopher Giancario, former chair of the Commodity Futures Trading Commission (CFTC) and current senior adviser to Baton, says: “We are now seeing a real shift in the collateral management landscape. The world’s largest FCMs are connecting directly with the world’s largest CCPs. This means that for the first time, it will be possible for a significant proportion of the total collateral held with CCPs to be automatically optimised.”
These five clearing houses together account for over 73 per cent of margin posted by US-registered future commission merchants (FCMs), according to Baton.
The Baton network allows FCMs to automate and optimise collateral movements, while facilitating mobility of cash and securities between FCMs, custodians and other infrastructure entities connected to the platform.
According to Baton, this allows market participants to access central counterparty (CCP) account balances and acceptable collateral-lists on demand, along with the ability to view assets deposited with external custody banks and CCPs.
Citi was the first FCM to link to ICE Clear Europe using Baton connectivity.
Baton is working with ICE Group on a roll-out plan that is expected to link ICE Clear US and ICE Clear Credit to the Baton network in coming months.
Citi’s head of clearing for the Americas and global head of financial resource management for futures, clearing and FXPB, Mariam Rafi, says: “With Baton we have been able to accelerate our innovation agenda and drive efficiencies throughout our entire clearing process. Our collateral management team can now access information in real-time and dynamically manage our inventory of eligible collateral across the network of CCPs we interact with the most.”
J.Christopher Giancario, former chair of the Commodity Futures Trading Commission (CFTC) and current senior adviser to Baton, says: “We are now seeing a real shift in the collateral management landscape. The world’s largest FCMs are connecting directly with the world’s largest CCPs. This means that for the first time, it will be possible for a significant proportion of the total collateral held with CCPs to be automatically optimised.”
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