BNP Paribas Securities Services Unit Debuts New Collateral Management Service

Oct 9 2017 | 6:08pm ET

The securities services division of Paris-based BNP Paribas has unveiled a new service that connects collateral takers and collateral givers to help unlock liquidity pools.

The new tri-party collateral management service comes as new regulations and practices require market participants to collateralize their financing and OTC derivative trades to manage counterparty risk, the company said in a statement.

The service enables clients to manage their collateral needs for all asset classes and all types of collateralized trades, helping them enhance operational efficiency. With such sophisticated collateral management solutions, market participants are able to mobilize assets quickly and use a wider range of securities to back up trades.

As a tri-party collateral agent, the company’s BNP Paribas Securities Services unit handles net exposure calculation, automatic collateral allocation and substitution, physical settlement and custody of assets, the statement added. It also provides access to segregated markets, enabling clients to access previously untapped sources of collateral. 

Furthermore, as a global and local custodian, BNP Paribas Securities Services is able to give clients the opportunity to source collateral directly on the domestic markets in which they invest, therefore alleviating the burden of constant collateral inventory management.

The service is live and complements BNP Paribas’ existing range of collateral management services, the statement continued. 

“Our objective is to create a community of collateral takers and collateral givers to develop a comprehensive pool of liquidity and remove bottlenecks in the sourcing of collateral,” said Patrick Colle, general manager of BNP Paribas Securities Services, in the statement. 

“[Our] service uses the latest technology and flexible algorithms to enable clients to monitor their collateral needs in real time thanks to intuitive dashboards, anticipate their future funding requirements, and set parameters based on specific allocation strategy requirements,” continued Hélène Virello, global head of collateral and valuation services.

A wholly-owned unit of French bank BNP Paribas, BNP Paribas Securities Services is a multi-asset custodian and servicing specialist with more than $2 billion in assets under administration and $9 billion in assets under custody on behalf of more than 10,000 funds across more than 95 markets. 

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