State Street signs up to GlobalCollateral margin service

State Street has agreed to pilot the service in order to deal with incoming collateral rules.

State Street has agreed to use a margin messaging service launched by GlobalCollateral, a joint venture of Euroclear and the Depository Trust and Clearing Corporation (DTCC). 

The service – which is powered by GlobalCollateral’s margin transit utility (MTU) – has been created with the aim of providing a straight through processing for settling margin obligations. 

In its participation State Street is looking to streamline their margin call processes as well as improving transparency and communications. 

“We look forward to participating in this programme,” said Dick Taggart, executive vice president and head of State Street’s investment manager services business. 

“Industry collaboration and a community-based model for margin call management can decrease risk, drive standardisation and increase efficiency for our clients.”

In the initial pilot scheme State Street will use select client portfolios to evaluate how the platform can be leveraged on a wider basis. 

The scheme will also target upcoming derivatives regulations that are set to create an increase in margin calls and complexity. 

“Global derivatives regulation will require market participants to completely transform their collateral management processes, if they are to keep pace with the expected increase in collateral calls,” said Mark Jennis, executive chairman at GlobalCollateral. 

“It is great to see State Street and many of their peers acknowledging the benefits of an automated margin call process, in support of their own operational and risk management goals as well as to increase client and counterparty satisfaction.”