DTCC-Euroclear Global Collateral, the joint venture of Euroclear and The Depository Trust & Clearing Corporation (DTCC), has announced that the Margin Transit Utility (MTU) collateral settlement infrastructure community has added six more dealers to its roster as it moves beyond its pilot production phase.
Goldman Sachs, JP Morgan, Morgan Stanley, Societe Generale, UBS and Wells Fargo have adopted MTU, Global Collateral says, joining over 30 investment management, administrator and custodian firms, including Brandywine Global Investment Management, Fidelity International, Franklin Templeton, Vanguard and Brown Brothers Harriman (BBH) who have adopted the service.
MTU straight-through-processing is designed to offer improved efficiency for the transfer of collateral among market participants, by centralising communications and settlement instructions within MTU. The service includes connectivity from AcadiaSoft’s MarginSphere and Alert for standing settlement instructions (SSIs), connectivity to custodians and triparty providers, confirmation of settlement, and standardised reporting.
“Calculating margin calls, generating and affirming calls and determining eligible collateral, and then instructing our custodian with real-time settlement updates and end-of-day position reporting, will significantly reduce operational, counterparty and liquidity risks,” says John Montgomery, senior specialist, Global Collateral at Vanguard. “Leveraging MTU in conjunction with AcadiaSoft’s MarginSphere and our collateral management system will greatly increase our overall collateral management efficiency beginning with OTC derivatives and then later for TBAs, ETDs and OTC cleared derivatives.”
Joseph Spiro, New York head of collateral at Societe Generale, adds, “We see MTU as an important utility solution to address challenges related to the manual processing of collateral settlements as well as the expected increase in volumes and frequency. Manual processes and scalability challenges are prevalent across the industry, and MTU will help to automate triparty and bilateral margin calls for both segregated and non-segregated accounts to better support clients and reduce settlement fails.”