DTCC-Euroclear Global Collateral and DTCC have revealed that the margin transit utility (MTU) collateral settlement infrastructure community continues to grow.
As part of the growth, Goldman Sachs, J.P. Morgan, Morgan Stanley, Societe Generale, UBS and Wells Fargo have all joined the MTU.
DTCC explained that the organisations who have adopted MTU have been driven by their clients’ needs to reduce risks related to operational, liquidity and counterparty risks.
The new editions join over 30 investment management, administrator and custodian firms, including Brandywine Global Investment Management, Fidelity International, Franklin Templeton, Vanguard and Brown Brothers Harriman, 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 enriched standing settlement instructions, connectivity to custodians and triparty providers, confirmation of settlement, and standardised reporting.
John Montgomery, senior specialist, global collateral at Vanguard, said: “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.”
“Leveraging MTU in conjunction with AcadiaSoft’s MarginSphere and our collateral management system will greatly increase our overall collateral management efficiency beginning with over-the-counter (OTC) derivatives and then later for TBAs, exchange-traded derivatives and OTC cleared derivatives.”
Courtney Gavin, vice president, custody product at Brown Brothers Harriman, stated: “MTU is an integral enabler of straight-through processing across the margin and collateral management process, and we look forward to partnering with additional clients who leverage MTU to reduce operational risk, drive greater efficiency and increase transparency throughout the collateral management process.”
Chris Childs, executive chairman and member of the board, Global Collateral, added: “GlobalCollateral continually engages with the industry to explore opportunities to address challenges in the collateral management and processing space.”
“We’re pleased to welcome a number of leading dealers to our growing MTU community and look forward to expanding our solutions to continue to meet the evolving needs of the dealer, buy-side and custodian communities.”
