BNP Paribas Securities Services (BNP Paribas), a global custodian with over USD 7 trillion assets under custody, boosts its collateral management solution by launching Collateral Access, a fully integrated and comprehensive offering to cater for both buy-side and sell-side clients.
Market dynamics and the search for increased transparency are pushing participants to implement a robust risk mitigation framework around collateral management. Incoming regulation, in particular EMIR and Dodd-Frank, has increased the need for collateral for all OTC derivatives, whether cleared or non-cleared. The new liquidity standards of Basel III will also affect future demand for High Quality Liquid Assets.
Patrick Colle, CEO at BNP Paribas Securities Services, said: “Providing a solution to mitigate counterparty risk remains at the heart of customers’ requirements. But our clients expect even more than that from their custodian. Optimisation and protection of collateral are becoming critical decision factors; whether long or short, clients want to be able to maximise the use of their assets. Those in need of collateral must best allocate their limited resources or effectively source eligible assets.
“Protection of the collateral portfolio is also a key concern. As a custodian with Global SIFI status and a unique combination of buy- and sell-side clients in our books, we are naturally best placed to safe keep, optimise and transform clients’ collateral.”
Hélène Virello, Head of Collateral Management at BNP Paribas Securities Services, added: “We are seeing increasing demand from clients to support them with a solution through the entire transaction process – from trade capture to reporting, including liquidity solutions. Collateral Access allows our clients to be fully compliant with new regulations through limited investments and within a short timeframe. We work with an open model, interfaced with multiple counterparties, clearers, custodians and market infrastructures. It has been carefully designed to address the challenges facing the industry in the years to come. Collateral Access comprises a set of modules available on a standalone basis or together with BNP Paribas Securities Services’ existing products.”
To address these market concerns, BNP Paribas has positioned the topic as a key strategic initiative across its business lines and reinforced its offering under the umbrella name of Collateral Access. This solution is fully integrated and can be tailored to client needs. It comprises three pillars:
– Efficient Risk Mitigation: aiming at actively managing counterparty risk, it relies on robust trade management for all instruments (including both cleared and non cleared derivatives), independent portfolio valuation, margin and dispute management – all supported by industry leading platforms.
– Optimisation and transformation: providing margin requirement simulation, it helps optimise collateral allocation and take advantage of financing solutions or lending opportunities.
– Protection and velocity: ensuring safekeeping and segregation of collateral, it provides connectivity to market infrastructures and an innovative settlement set-up, to reduce liquidity friction between counterparties.