GlobalCollateral Launches Tool for Cross-Border Collateral Mobility

collateral

DTCC-Euroclear Global Collateral Ltd. launched its new Inventory Management Service (IMS) to allow clients to mobilize securities from the US to Europe to use as collateral.

Global Collateral, a joint venture between the Deposit Trust & Clearing Corporation (DTCC) and Euroclear, said IMS fulfills one of its key goals of delivering cross-border collateral mobility. GlobalCollateral CEO Michael Shipton said the IMS is a major step for the company.

“IMS delivers one of the joint venture’s key objectives—to address what market practitioners have long recognized as a critical need to be able to directly mobilize and use collateral across borders and to move dollar assets into Europe,” Shipton said. “With IMS, firms have greater control and flexibility in the way they utilize their assets.”

The solution allows financial institutions to optimize collateral across two markets that service a combined $78 trillion in assets and take advantage of the demand for high-quality securities to back trades. Dealers can consolidate assets across markets and asset classes and the use those to satisfy exposures. Participants can use the tool to move dollar assets into Europe in an efficient and cost-effective manner.

GlobalCollateral has been working on a margin settlement messaging service pilot program expected to go live this year. The service, which counts State Street and Northern Trust as participants, will take the place of manual processes involving constant back and forth between parties involved in settlements in a time of high collateral volumes.

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