Northern Trust to use DTCC/Euroclear margin call tool
Northern Trust has signed up to use a settlement messaging service built by post-trade giants DTCC and Euroclear.
The Chicago-based bank, one of the world’s largest fund administrators, will implement GlobalCollateral’s Settlement Messaging Service.
The aim is to streamline Northern Trust’s margin call process, increase transparency through automated collateral settlement tracking, enhance client service and improve custodian communications.
Manual processes are still common in the margin call process, creating risk, limiting collateral settlement transparency and requiring frequent one-on-one communications with their custodian banks.
Powered by Margin Transit Utility technology, the GlobalCollateral messaging platform is currently ready for client on-boarding and is anticipated to go live with client collateral movements during the first half of 2017.
The launch also comes ahead of global derivatives regulations set to create an increase in margin calls and operational complexity.
“Global derivatives regulation and the resulting increase in collateral calls will require market participants to improve their collateral management processes,” said Mark Jennis, executive chairman at GlobalCollateral Ltd.
“It is great to see Northern Trust and other leading global fund administrators recognize the benefits of an automated margin call process, including lower operational risk, increased transparency and improved client and counterparty satisfaction.”
“Northern Trust looks forward to taking advantage of GlobalCollateral’s Settlement Messaging capabilities,” said Pete Cherecwich, Americas head of corporate & institutional services at Northern Trust.
“We believe that one of the keys to excellent client service is to take advantage of new and innovative technologies, especially those that not only create operational efficiencies and improved risk management, but can also enable us to provide increased transparency to our clients.”
Northern Trust plans to offer the service to its clients, based upon demand.
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