Baton Systems’ ICE integration to boost collateral automation for clearing firms

Baton Systems announced that it’s completed connecting to Intercontinental Exchange (ICE), making ICE Clear Europe the fifth major global CCP available on the Baton network. All FCMs using Baton will now be able to automate and optimize collateral holdings and expedite the movement of cash and securities with the CCPs of greatest strategic importance to their business.

With ICE integration complete by Baton, clearing firms will be able to automate collateral management across five Major CCPs, together comprising more than 73% of margin, placed by US registered FCMs. These firms include the world’s largest financial institutions, responsible for managing 43% of the funds held by global CCPs. Citi recently became the first FCM to connect to ICE Clear Europe and benefit from the extended CCP network.

Using Baton for automated collateral management allows market participants to access CCP account balances and acceptable collateral lists on-demand and view all assets deposited at external custody banks and CCPs. FCMs can also be automatically alerted to changes and introduce zero-friction workflows to optimise allocation and accelerate productivity by instructing multiple cash and securities movements via the Baton interface.

Mariam Rafi, managing director, Americas head of Clearing and FXPB and global head of Financial Resource Management, Futures, Clearing and FXPB at Citi, said in a statement: “Our collateral management team can now access information in real-time and dynamically manage our inventory of eligible collateral across the network of CCPs we interact with the most, which enables us to better serve our clients.”

Christopher Giancarlo, senior advisor to Baton and former CFTC chair, said in a statement: “What we are now seeing is a real shift in the collateral management landscape. The world’s largest FCMs are connecting directly with the world’s largest CCPs – this means that for the first time in history it will be possible for a significant proportion of the total collateral held with CCPs globally to be automatically optimized.”

He added: “As the network expands the benefits derived by all participants are only likely to increase. This presents huge potential for the industry as a whole to eliminate unnecessary risks.”

Chris Edmonds, global head of Clearing and Risk at ICE, said in a statement: “With Baton completing a connection to the ICE Collateral API, our clearing members can further optimize their collateral and margin management processes. We are now facilitating additional ICE CCPs with Baton, so we can assist more of our clearing members globally across the numerous asset classes we clear.”

Tucker Dona, head of Business Development and Client Success at Baton Systems, said in a statement: “The market coverage that’s now possible via the Baton network is remarkable – as is the speed that we can bring new participants on-board. We can now get new clearing firms live on the platform, with full access to our extended CCP network, in a matter of weeks.”

ICE Clear Europe is the first member of the ICE Group to go-live on the Baton platform. Baton is now working on a structured roll-out plan that should see ICE Clear US and ICE Clear Credit connected in coming months.

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