State Street launches tri-party service on Collateral+ platform
27 September 2021 US
Image: State Street/Staffan Ahlner
State Street has announced the addition of State Street Triparty to its Collateral+ platform, in line with the strategic expansion of its collateral management programme.
This release aligns with the announcement that Staffan Ahlner, State Street’s head of Collateral+, made to SFT in its collateral symposium on 3 March.
In that forum he said that State Street will be adding tri-party services to its Collateral+ suite in time for UMR collateral posting, helping buy-side firms to optimise collateral usage and efficiency when posting margin to meet UMR initial and variation margin commitments.
The tri-party service allows clients to post and receive UMR collateral utilising assets held in custody with, or passed to, State Street.
The Boston-based firm says that tri-party functions for securities lending and repurchase agreement (repo) transactions will follow in the near future, alongside support for peer-to-peer trading.
Speaking to SFT, Ahlner explains: “The tri-party collateral service release comes on the back of a period of extensive testing with clients — and further testing is currently ongoing with buy-side and sell-side firms in preparation for extending this service for securities lending, repo trades and for peer-to-peer transactions that are expected to go live before the end of 2021.”
The initial strategy has focused on rolling out the tri-party service to support buy-side clients in adapting to Phase 5 of UMR, which was enacted on 1 September. “With this release, State Street will bring a wide range of post-trade tools to market, available via the Collateral+ platform, particularly assisting buy-side firms in meeting their requirement for margin management and collateral optimisation," says Ahlner.
On the funding side, this will also help mid-sized banks to manage collateral more efficiently in meeting their requirement for liquidity through secured financing transactions.
“Efficient collateral management is essential for our clients and prospects, not simply from a regulatory perspective but also from a liquidity planning and risk management standpoint,” says Ahlner.
“With UMR being a mandatory requirement, this has provided an opportunity for many firms to revisit their collateral strategy looking holistically across the organisation — taking the opportunity to minimise collateral fragmentation across product silos and geographical locations.”
“State Street has taken the approach of partnering with technology firms and this has enabled us to develop a wide array of pre-trade and post-trade tools, while minimising our time to market,” says Ahlner.
“This provides exciting opportunities for empowering the buy-side, for delivering powerful analytical tools and bringing major efficiency gains to collateral mobilisation and allocation,” he concludes.
This release aligns with the announcement that Staffan Ahlner, State Street’s head of Collateral+, made to SFT in its collateral symposium on 3 March.
In that forum he said that State Street will be adding tri-party services to its Collateral+ suite in time for UMR collateral posting, helping buy-side firms to optimise collateral usage and efficiency when posting margin to meet UMR initial and variation margin commitments.
The tri-party service allows clients to post and receive UMR collateral utilising assets held in custody with, or passed to, State Street.
The Boston-based firm says that tri-party functions for securities lending and repurchase agreement (repo) transactions will follow in the near future, alongside support for peer-to-peer trading.
Speaking to SFT, Ahlner explains: “The tri-party collateral service release comes on the back of a period of extensive testing with clients — and further testing is currently ongoing with buy-side and sell-side firms in preparation for extending this service for securities lending, repo trades and for peer-to-peer transactions that are expected to go live before the end of 2021.”
The initial strategy has focused on rolling out the tri-party service to support buy-side clients in adapting to Phase 5 of UMR, which was enacted on 1 September. “With this release, State Street will bring a wide range of post-trade tools to market, available via the Collateral+ platform, particularly assisting buy-side firms in meeting their requirement for margin management and collateral optimisation," says Ahlner.
On the funding side, this will also help mid-sized banks to manage collateral more efficiently in meeting their requirement for liquidity through secured financing transactions.
“Efficient collateral management is essential for our clients and prospects, not simply from a regulatory perspective but also from a liquidity planning and risk management standpoint,” says Ahlner.
“With UMR being a mandatory requirement, this has provided an opportunity for many firms to revisit their collateral strategy looking holistically across the organisation — taking the opportunity to minimise collateral fragmentation across product silos and geographical locations.”
“State Street has taken the approach of partnering with technology firms and this has enabled us to develop a wide array of pre-trade and post-trade tools, while minimising our time to market,” says Ahlner.
“This provides exciting opportunities for empowering the buy-side, for delivering powerful analytical tools and bringing major efficiency gains to collateral mobilisation and allocation,” he concludes.
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