BNY Mellon has confirmed a collaboration with Baton System through which it will utilise Baton’s Core-Collateral service in its collateral management platform.
According to the two companies, this will enable mutual clients to optimise and allocate cash and non-cash collateral more efficiently across their cleared and uncleared exposures, supporting consistent workflow and reporting across securities lending, triparty repo and derivatives margining.
This will enable the New-York based bank to draw on Baton’s extensive CCP network and apply the benefits of its own Enterprise Continuous Portfolio Optimisation (ECPO) service to improve collateral velocity and to help users reduce their financing costs.
BNY Mellon digital business leader Victor O’Laughlen says: “We are excited about the tremendous potential this joint service presents to our clients, empowering them to optimise, mobilise and connect all of their collateral needs across different products and venues. Working with Baton, we will be delivering a solution at the leading edge of innovation.”
Jerome Kemp, president at Baton Systems added: “We at Baton Systems are excited to be launching our collaboration with BNY Mellon. The union of Baton’s extensive CCP connectivity with the ground-breaking functionality of BNY Mellon’s ECPO service forms a powerful offering to cleared derivatives market participants.
“The rapid mobilisation of assets and the enhanced optimisation of margin collateralisation is a game changer for the market.”
Baton indicates that it will continue to expand its global CCP network, which currently supports more than 93 per cent of cleared margin posted by US-registered futures commission merchants globally, with negotiations ongoing to add further CCPs in coming months subject to the execution of a definitive collaboration agreement
Using distributed ledger technology, Baton aims to drive greater efficiency across the post-trade process, creating interoperable and connected digital market infrastructures from trade matching through to settlement, utilising automated rules-based workflow and “on-demand” settlement.
