Collateral processing is becoming significantly more complex due to global financial reform. The need for collateral is expected to grow, yet the enhanced market safety and soundness intended by the new rules (Basel III, Dodd-Frank, EMIR and similar legislation in other jurisdictions) will be lost if global operating infrastructure cannot keep pace.
DTCC-Euroclear GlobalCollateral Ltd. is a scalable, robust and open industry infrastructure that will streamline collateral processing on a global basis. It brings together two of the industry's largest post-trade market infrastructures to develop and streamline margin settlement processes, and to enhance open access to securities collateral irrespective of location, thereby improving the stability and soundness of financial markets. This open architecture global infrastructure will deliver unprecedented operating efficiencies to market participants and improve the stability and soundness of financial markets.
GlobalCollateral Ltd will offer market participants:
A single, global view of eligible assets wherever they may be; accurate and timely consolidated reporting of collateral obligations; a consolidated view of collateral flows and obligations to enable regulators to monitor market stability
Allocation of assets to where they are needed most to meet collateral obligations across the business; substitution of collateral to optimally meet obligations; access to a global network of high quality collateral givers and takers
Cost efficiency – benefit from scalable and resilient industry infrastructure; operational efficiency – automated and reliable straight through processes; capital efficiency –get best use of assets and reduce liquidity requirements
Confidence that both settlement and collateral obligations can be optimally met; appropriate segregation of assets through DTCC and Euroclear; underpinned by robustness, experience and commitment of DTCC and Euroclear
GlobalCollateral’s processing solution for derivatives and financing transactions draws on the capabilities of the Margin Transit Utility (MTU) and Collateral Management Utility (CMU). The MTU is a comprehensive, straight-through processing solution for streamlining the processing and settlement of margin calls and collateral. The CMU is a global infrastructure delivering a full range of collateral sourcing, processing, monitoring and reporting services to a large ecosystem of market participants—in a harmonized way, across exposure types, regions and asset classes.