State Street’s Collateral+ business is now operational with the Depository Trust & Clearing Corporation’s (DTCC) Margin Transit Utility (MTU).
By leveraging MTU, State Street’s Collateral+ business will now be able to more efficiently validate, enrich, settle, report and monitor third party collateral.
State Street says it will be able to do this while easily connecting to and sharing information with multiple counterparties on behalf of its clients.
MTU has been designed for simplifying the transfer of collateral among market participants. The service helps reduce operational risk by standardising and automating the margin process from the point of agreement through to settlement.
Additionally, State Street says MTU helps eliminate the need of using faxes and emails for processing margin and settlement activity.
According to Staffan Ahlner, global head of Collateral+ for State Street, this functionality is expected to be essential for State Street’s ability to improve operational efficiency and remove unnecessary complexity so that overall risk is mitigated and collateral is ultimately released quicker.
Ahlner comments: “We continue to focus on making key investments in all areas of the firm’s Collateral Optimization Group, and given the recent and continuing market volatility, coupled with the final phases of uncleared margin rules (UMR) for over-the counter (OTC) derivatives, an increasing number of our clients are looking to replace manual processes with new tools that focus on automation such as DTCC’s MTU.”
“We expect this functionally to be essential for our ability to improve operational efficiency and remove unnecessary complexity so that overall risk is mitigated and collateral is ultimately released quicker,” adds Ahlner.
