IDEAS home Printed from https://ideas.repec.org/a/aza/jsoc00/y2010v3i2p103-110.html
   My bibliography  Save this article

Automating the OTC derivative collateral management function

Author

Listed:
  • Ciulla, Thomas
  • Bloom, Daniel
  • Ages, Justin

Abstract

As the use of OTC derivatives continues, financial services participants are placing greater demands on their post-trade operations. This increased demand has directly affected the collateral management services that are essential to mitigate credit risk between trading counterparties. It has also placed additional pressure on collateral management professionals to devise automated and scalable solutions to facilitate the accurate and timely exchange of collateral between counterparties. Since central counterparties (CCPs) do not eliminate the need for automation, straight through processing (STP) margin rules, coupled with electronic messaging between counterparties greatly enhance the efficiency of an organisation’s collateral and credit risk functions. This paper provides an overview of some of the solutions that are currently being developed and utilised by organisations to automate their collateral management processes. It also provides an understanding of how organisations can employ STP and electronic messaging and will also include examples of STP margin call rules. Lastly, the paper will describe the approach that each of the leading vendors is taking to develop STP and electronic messaging functionality.

Suggested Citation

  • Ciulla, Thomas & Bloom, Daniel & Ages, Justin, 2010. "Automating the OTC derivative collateral management function," Journal of Securities Operations & Custody, Henry Stewart Publications, vol. 3(2), pages 103-110, August.
    • Handle: RePEc:aza:jsoc00:y:2010:v:3:i:2:p:103-110
    as

    Download full text from publisher

    File URL: https://hstalks.com/article/2042/download/
    Download Restriction: Requires a paid subscription for full access.
    File URL: https://hstalks.com/article/2042/
    Download Restriction: Requires a paid subscription for full access.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    STP; electronic messaging; automation; OTC derivatives; collateral management;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aza:jsoc00:y:2010:v:3:i:2:p:103-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Henry Stewart Talks (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.