Strategies for Successful Collateral Management in the Age of CCPs
Finadium
November 2011
The collateral management market continues to evolve as more regulations become finalized and asset managers, insurance companies and others make decisions on outsourcing the process or investing internally. Technology remains central to this market; increased complexities are resulting in a greater need for automating disparate sources of information and in facilitating decision making.
The notion of outsourcing for end-users has taken on additional forms and definitions in the collateral management market. End-users may outsource technology by acquiring collateral management software that is managed in-house or may use a hosted solution. They may also outsource the process of collateral management by hiring a bank to take over both technology and day-to-day operations of collateral movements. While the majority of end-users continue to wait for final regulations to be written, the largest have already made investments in their own collateral infrastructure or have elected to acquire collateral technology or outsource the service. Smaller firms are just beginning to look at their strategies and options for this market.
In this report, produced by Finadium and sponsored by Omgeo, we evaluate the current state of collateral management including preparations for buying or building technology, process outsourcing, the size of the market and participant views on the optimal collateral management structure. This report is based on interviews with 38 banks, hedge funds and asset managers.
This report is 23 pages with 7 exhibits.
TABLE OF CONTENTS
■ Executive Summary
■ Upgrading the Importance of Collateral Management
■ Getting from Regulatory Principles to Implementation
■ A Growing Collateral Management Market But Not All
Products Benefit
■ Three Strategies for Successful Collateral Management
■ Best Practices for Technology and Collateral Management
■ The Road Ahead
■ About the Author
■ About Finadium