Baton Systems announced its work with J.P. Morgan’ Collateral Services team, to enable triparty clients to automate the optimization of collateral to meet margin calls at a range of CCPs globally. Baton’s Core-Collateral solution has been integrated into J.P. Morgan’s CCP Margin Exchange (CCPMx).
Graham Gooden, EMEA head of Triparty Collateral Management at J.P. Morgan, said in a statement that this will “help clients find increased efficiencies through improved collateral mobilisation in the clearing process.”
Having gone live with the first CCP in November, the collaboration will enable the roll out of the solution across Baton’s extensive CCP network which currently includes 13 major CCPs across EMEA, North America and Asia, together comprising more than 94% of cleared margin posted by US-registered FCMs. Baton plans to extend CCP connectivity globally with further CCPs expected to be added in the new year.
As the higher interest rate environment continues to challenge derivative market participants, selecting the optimal composition to meet margin obligations is becoming critical. However, siloed data and manual collateral management processes often mean that understanding what collateral is available, selecting and then mobilizing the most advantageous assets proves to be an extremely complicated, time-consuming and laborious task.
Instead, triparty clients can now aggregate all available collateral across their various sources into a single longbox, automatically select the most cost-effective securities and mobilize all assets. In doing so, they are improving the efficiency of the collateral management process, allowing more effective funding decisions to be made and reducing operational risk.
Arjun Jayaram, founder and CEO of Baton Systems, said in a statement that the collaboration will “allow clearing members to most efficiently meet their CCP margin requirements,” adding that through the partnership the fintech is “able to extend the economic value our Core-Collateral offering can bring to additional market participants which is proving increasingly important given the current environment.”