Societe Generale has launched “Tempo”, a comprehensive and innovative collateral management outsourcing solution aimed both at buy-side and sell-side market participants, including traditional and alternative asset managers, institutional investors, banks and major corporates.
Increasing sophistication of collateral management processes
With the introduction of new risk management standards and margining regulations for cleared and uncleared derivatives, by EMIR in Europe and the Dodd Frank Act in the United States, collateral will progressively need to be managed by sophisticated, automated processes across a network of multiple counterparties, clearing brokers and central counterparty clearing houses (CCPs). This will entail significant investment to adapt existing systems and to allocate resources capable of handling these new layers of complexity. Varying collateral eligibility, concentration and haircut criteria will also increase the need for additional high quality collateral. The challenge will be achieving access to this through collateral optimisation and transformation, funding and sourcing supplementary asset pools.
“Tempo”, a fully-integrated multi-asset solution in agency mode
In response to this growing complexity, Societe Generale has leveraged on existing strengths in its securities services business, Societe Generale Securities Services (SGSS), and its multi-asset prime brokerage specialist, Societe Generale Prime Services, to provide clients with a fully-integrated collateral management outsourcing solution. Available in agency mode for OTC derivatives, exchange traded derivatives, securities lending and REPO collateral needs, “Tempo” spans the entire collateral management life-cycle and includes:
• Dispute management for efficient transaction processing and counterparty discrepancy resolution.
• Asset pool management for asset consolidation, liquidity management, collateral oversight and valuation.
• Collateral allocation/optimisation for cost-efficient transactions, collateral transformation and access to high quality collateral pools.
This outsourcing solution enables clients to continue diversifying their investment strategies in compliance with evolving regulatory requirements, while benefiting from diversified collateral mass, productivity gains, reduced counterparty and operational risk and enhanced operational flexibility. “Tempo” seamlessly integrates within a client’s existing contractual and IT ecosystem and can be complemented by Societe Generale Prime Services‘ clearing solution for OTC derivatives.
“As transactions will increasingly need to be collateralised to mitigate market risk, implementing the best possible collateral management strategy will be imperative for both the buy-side and sell-side.” comments Clément Phelipeau, Product manager, Derivatives and Collateral Management Services, at SGSS. ““Tempo” is a unique combination of Societe Generale’s multi-asset collateral management expertise which will help clients make the most of their assets in the coming years.”