Global regulatory reforms have fundamentally changed over the counter (OTC) post-trade activities, in areas such as OTC derivatives, repos and securities lending transactions. New rules have profoundly re-shaped operating and business models of financial institutions. Examples include margin rules for cleared and non-cleared derivatives, reporting to trade repositories, the securities financing transactions regulation (SFTR) in Europe, the Basel III international regulatory framework for banks… to name a few.
Market dynamics and the need for increased transparency are also pushing participants to implement a robust credit risk mitigation framework around over-the-counter transactions.
As a leading custodian with a diversified client base (buy and sell–side) and a strong experience in post-trade services (custody, fund administration, depositary bank …), we are ideally positioned to support our clients and offer a holistic and modular suite of solutions – Collateral Access.
Transaction processing and lifecycle management
Risk management relies on robust trade management frameworks. Our solution encompasses post-trade processing and life cycle management services, portfolio reconciliation and reporting to trade repositories.
Valuation of OTC instruments requires strong capabilities and expertise and we believe the independence of OTC prices is important in fast changing markets. We offer a comprehensive and sophisticated valuation service, relying on recognised valuations partners, which can complement the rest of our OTC and administration services.
Collateral management solutions
Our comprehensive suite of solutions includes both tri-party and bilateral collateral management.
As a tri-party collateral agent, we are uniquely positioned to connect buy and sell-side market participants in order to create a community of collateral takers and collateral givers and develop a comprehensive pool of liquidity.
This service allows our clients to manage their collateral needs for all asset classes and all types of collateralised trades, helping them enhance operational efficiency. Our solution makes the most of our extensive custody network to enable us to mobilise collateral quickly when and where it is needed.
As a bilateral collateral management agent, we offer collateral services to buy-side market participants since 2011 as part of our entire OTC suite. We have designed a solution that answer to regulatory requirements but also that can bring flexibility to clients looking for an open and flexible model. Our solution supports a wide range of over-the-counter derivative transactions, foreign exchange and repos.
Initial margin for non-cleared derivatives
We help market participants to address their collateral challenges by offering a wide array of solutions, including calculation of Initial Margin (IM), including the ISDA Standard Initial Margin Method (SIMM), connectivity to market utilities, margining services across initial margin and variation margin, triparty collateral management and secured and compliant custody framework.
Segregation of initial margin
“Margin Protect” is our solution to ensure full compliance with the regulatory initial margin requirements for OTC transactions that are not cleared through a central counterparty, mitigation of counterparty risk, and asset safety. Through the framework of an ISDA-compliant Account Control Agreement, and based on our robust and efficient custody model, we assist the pledger and the secured party with the segregation of the initial margin, whether paid in securities or cash.