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September 17, 2013

LCH Announces Support for the SWIFT MX Securities and Cash Collateral Instructions

Whilst not on the face of it an exciting announcement, in the context of EMIR quite a big deal, and here's why: Once a CCP is authorised by EMIR, they must offer the Individual Segregation Model, which means a deposit or withdrawal of assets must be instructed directly to that account and no other. An operational burden is making these instructions to a CCP for potentially thousands of these accounts, an electronic means is the best way to simplify this process. A message dialogue which includes the idea of an asset being proposed and accepted / rejected by the recipient is required. I'm not party to the design of the SWIFT MX messages (I tried to find them on the SWIFT website but failed), but I'm pretty sure they were designed with a choreography to suit a general collateral management message exchange. Hence the move by LCH to support the MX messages should in time make ISAs easier to support for Clearing Members and make implementing ISAs easier, and possibly cheaper for Clients. Full story over at LCH: LCH.Clearnet Group – Media Centre – Press Releases – 2013-09-17 LCH.Clearnet to introduce SWIFT MX Standard messaging to improve collateral management efficiency. Does anyone know the state of other CCPs in providing an API for delivery and withdrawal of securities? Let me know in the comments or email me direct. Bill. [See comments below for useful links to MX related documentation]  

 


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