CMU and MTU Become Me and You
In March 2014 DTCC and Euroclear announced a Joint Venture called GlobalCollateral with two headline services:
The MTU provides communications and process integration between parties moving collateral, starting with an exchange of messages on the AcadiaSoft platform through to custodians for the movement of assets. The CMU is an integration which enables the pledge of assets from within DTC or Euroclear to cover exposures and associated process automation.
In an announcement on the GlobalCollateral website the firm announce:
Since DTCC-Euroclear GlobalCollateral was formed in 2014, we have been very pleased with industry receptiveness to the Margin Transit Utility (MTU) and the Collateral Management Utility (CMU). The market is in need of collateral management solutions that streamline and automate processes while enabling firms to meet emerging regulations. However, as the market has continued to evolve, we regularly assess the most efficient way to deliver the highest-quality services to support clients. As a result, DTCC and Euroclear have jointly decided to separate the two products and dissolve the joint venture, DTCC-Euroclear GlobalCollateral operating entity, effective March 10. DTCC and Euroclear are carefully managing this process to ensure the transition is seamless and that there is no impact to clients.
DTCC will integrate MTU into its Institutional Trade Processing (ITP) business to provide more holistic support for firms, and Euroclear will become the sole owner of the GlobalCollateral entity offering the CMU. DTCC and Euroclear maintain a strong working relationship, and the firms will continue to collaborate closely on the development of both MTU and CMU to meet the industry's needs to manage collateral movements across borders.
For information on DTCC's Margin Transit Utility (MTU) please visit dtcc.com/collateral-management. For information on Euroclear's Collateral Management Utility (CMU), please visit www.euroclear.com/services/en/collateral-management.html.
Looking at the two services, the MTU stands above any specific custodian and provides industry automation, whereas CMU is tied closed to DTC and Euroclear. Perhaps this decision will open the door to a broader integration of MTU with other custodians.