GlobalCollateral’s Margin Transit Utility leverages industry standard settlement instruction data to help to reduce cost in remediating collateral settlement fails
As part of an industry-wide effort to reduce collateral settlement fails, DTCC-Euroclear Global Collateral Ltd’s (GlobalCollatera) Margin Transit Utility (MTU) offers collateral settlement straight-through processing by leveraging Omgeo ALERT solution.
As a global repository for storing Standing Settlement Instruction (SSI) data, ALERT completed enhancements to become the industry’s single and centralized ‘SSI Utility.’ With 6.6 million settlement instructions as of year-end 2016, an increase of 15% over 2015.
“In a short amount of time, ALERT has become the industry’s only SSI Utility – allowing a community of investment managers, broker/dealers and custodian banks to take advantage of multiple benefits,” said Paula Arthus, Managing Director and Head of Omgeo and Data Services at DTCC. “These benefits include ensuring the complete automated communication of account and settlement instructions, lowering costs and streamlining trade processing, taking advantage of DTCC’s expanded asset class coverage and, more importantly, increasing data quality by establishing levels of firm authorisation.”
In 2015, DTCC also added support for collateral SSIs in ALERT, enabling investment managers and broker/dealers alike to create and maintain SSIs for collateral movements, and provide real-time enrichment of collateral SSIs in the GlobalCollateral’s MTU.
The MTU enables the straight-through processing of margin calls, mitigating systemic risk and providing improved liquidity and operational risk management.
Based on collateral management-focused research conducted by PwC in 2015, incorrect or incomplete reference data for SSIs was identified as the most common cause of collateral settlement fails.
“Leveraging Omgeo ALERT will directly decrease the industry’s collateral settlement fails and also reduce costs imposed by Treasury Market Practices Group (TMPG) charges,” said Ted Leveroni, Chief Commercial Officer of DTCC-Euroclear GlobalCollateral Ltd.
DTCC-Euroclear Global Collateral ltd. launches new Service to deliver Cross-Border Collateral Mobility
DTCC-Euroclear Global Collateral Ltd (GlobalCollateral), a joint venture of The Depository Trust & Clearing Corporation (DTCC) and Euroclear, today announced the launch of the Inventory Management Service (IMS), a transformative solution that enables market participants to seamlessly mobilize securities from the U.S. to Europe for use as collateral amid rising demand for high-quality securities to back trades.
With IMS, financial institutions can now optimize collateral across two of the largest global market infrastructures servicing a combined $78 trillion in assets.