LCH.Clearnet names BNY Mellon as US collateral custodian
02 December 2011 London
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LCH.Clearnet has named BNY Mellon as an additional US collateral custodian with which members and their clients may lodge collateral.
New regulation in the US and Europe recognises the crucial role that clearing plays in ensuring the safe functioning of markets. This has resulted in a drive to clear a wider variety of financial instruments, including OTC derivatives, which has led to a focus on collateral management.
Collateral is lodged by members of a clearing house, with a third party, both at the outset of a trade and thereafter on a daily basis in order to manage market risk and ensure that any variation margin is paid throughout the duration of the trade. As a custodian for LCH.Clearnet, BNY Mellon will provide members and their clients with a choice of provider both for lodging collateral at the commencement of a trade and for managing the allocation of funds to either party due to market variation throughout the lifecycle of the trade.
Daniel Maguire, head of SwapClear US said, "We are very pleased to be able to name BNY Mellon as a collateral custodian. This provides our members and their clients with a choice of custodian with which to lodge collateral, whilst maintaining our stringent approach to risk management."
"We have the operational infrastructure and expertise to handle the collateral management needs of clients globally and we are extremely pleased to work with LCH.Clearnet to provide additional choice and capabilities to their members,” said John Vinci, global head of product management and strategy managing director for BNY Mellon broker-dealer services.
New regulation in the US and Europe recognises the crucial role that clearing plays in ensuring the safe functioning of markets. This has resulted in a drive to clear a wider variety of financial instruments, including OTC derivatives, which has led to a focus on collateral management.
Collateral is lodged by members of a clearing house, with a third party, both at the outset of a trade and thereafter on a daily basis in order to manage market risk and ensure that any variation margin is paid throughout the duration of the trade. As a custodian for LCH.Clearnet, BNY Mellon will provide members and their clients with a choice of provider both for lodging collateral at the commencement of a trade and for managing the allocation of funds to either party due to market variation throughout the lifecycle of the trade.
Daniel Maguire, head of SwapClear US said, "We are very pleased to be able to name BNY Mellon as a collateral custodian. This provides our members and their clients with a choice of custodian with which to lodge collateral, whilst maintaining our stringent approach to risk management."
"We have the operational infrastructure and expertise to handle the collateral management needs of clients globally and we are extremely pleased to work with LCH.Clearnet to provide additional choice and capabilities to their members,” said John Vinci, global head of product management and strategy managing director for BNY Mellon broker-dealer services.
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