BNP Paribas Provides Integrated Collateral Management Service for Buy-side and Sell-side

BNP Paribas has launched an integrated collateral management service for both buy-side and sell-side clients.

The service, which is an umbrella name for the key strategic initiatives in regard to collateral management across BNP Paribas Securities Services’ business lines, aims to provide a risk mitigation framework around collateral management, amidst the increased need for collateral for all OTC derivatives, whether cleared or non-cleared. Incoming regulation such as EMIR and Dodd Frank have increased the need for collateral for all OTC derivatives and the new liquidity standards of Basel III will also affect future demand for high quality liquid assets.

Patrick Colle, CEO at BNP Paribas Securities Services, said: “Providing a solution to mitigate counterparty risk remains at the heart of customers’ requirements. But our clients expect even more than that from their custodian. Optimization and protection of collateral are becoming critical decision factors; whether long or short, clients want to be able to maximize the use of their assets. Those in need of collateral must best allocate their limited resources or effectively source eligible assets.


“Protection of the collateral portfolio is also a key concern. As a custodian with Global SIFI status and a unique combination of buy- and sell-side clients in our books, we are naturally best placed to safe keep, optimize and transform clients’ collateral.”


Hélène Virello, head of Collateral Management at BNP Paribas Securities Services, added: “We are seeing increasing demand from clients to support them with a solution through the entire transaction process – from trade capture to reporting, including liquidity solutions.
Collateral Access allows our clients to be fully compliant with new regulations through limited investments and within a short timeframe.

“We work with an open model, interfaced with multiple counterparties, clearers, custodians and market infrastructures. It has been carefully designed to address the challenges facing the industry in the years to come. Collateral Access comprises a set of modules available on a standalone basis or together with BNP Paribas Securities Services’ existing products.”



This service comprises three pillars: 


- Efficient Risk Mitigation: aiming at actively managing counterparty risk, it relies on robust trade management for all instruments (including both cleared and non cleared derivatives), independent portfolio valuation, margin and dispute management – all supported by industry leading platforms.
– Optimization and transformation: providing margin requirement simulation, it helps optimize collateral allocation and take advantage of financing solutions or lending opportunities.

- Protection and velocity: ensuring safekeeping and segregation of collateral, it provides connectivity to market infrastructures and an innovative settlement set-up, to reduce liquidity friction between counterparties.