DTCC-Euroclear Global Collateral Ltd, a joint venture of Euroclear and The Depository Trust & Clearing Corporation (DTCC), and fintech company NEX, has announced a new partnership to streamline and improve OTC derivatives margin call processes.
As a new member of the GlobalCollateral Partner Program, NEX says it is currently working to link its triResolve Margin web-based collateral management solution with GlobalCollateral’s Margin Transit Utility (MTU) to provide mutual clients with a centralized view across margin call operations. According to NEX, the connected service will also help users to meet regulatory compliance objectives around the margining of uncleared OTC derivatives transactions.
Through this partnership, mutual users will be able to manage the entire margin call process on the triResolve Margin platform achieving greater straight through processing by leveraging out-of-the-box connectivity to both AcadiaSoft’s MarginSphere and new MTU functionality. The integrated service will allow triResolve Margin to automatically calculate margin requirements leveraging information from its reconciled trade, collateral balance and CSA data, and then communicate the details to MarginSphere. Once the call is matched and the collateral to be moved has been agreed in MarginSphere, it will then be automatically sent to MTU for standing settlement instruction enrichment from DTCC ALERT. MTU will then generate settlement instructions to the counterparty and/or custodian and receive real-time settlement updates back. Finally, MTU will communicate the settlement status back to triResolve Margin, completing the transaction.
“Many of today’s collateral management processes continue to be manual and siloed. As a result, greater levels of automation and straight through processing are urgently needed if firms are to keep pace with regulatory requirements and fluctuations in margin call volumes,” said Mark Jennis, Executive Chairman at GlobalCollateral. “We welcome the opportunity to partner with NEX to not only increase automation and STP, but to also offer an easier path to adoption via the pre-integration of our services,” he continued.
According to Raf Pritchard, CEO of triResolve. “Currently over 110 clients use triResolve Margin to manage their collateral management workflow. We look forward to partnering with the MTU settlement service and further streamlining the collateral management process for our clients.”
With integration already underway for a number of mutual clients, the first clients are expected to go live in Q2.