BNY Mellon has launched a global outsourced derivatives margin management service for financial institutions, clearing members and central counterparties.
The service, called MarginEdge, helps segregate assets, supports transformation services, optimizes the use and allocation of collateral, consolidates margin management across collateral locations and providers, and simplifies connectivity among market participants for margin movements. It will be used for listed, cleared over-the-counter (OTC) and bilateral OTC derivatives.
The service will be particularly useful in advance of mandatory clearing of OTC derivatives. The service offers hedge funds and other market participants an outsourced option allowing BNY Mellon to handle their margin calls and recalls.
Given our global capabilities in servicing clients fixed income and equity collateral management needs, this strategic expansion into helping clients with their derivatives collateral management needs represents a natural evolution of our business model, says James Malgieri, CEO of BNY Mellon Broker-Dealer Services. We have the operational infrastructure and expertise, as well as a deep understanding of the global financial markets, which position us to meet our clients evolving needs anywhere in the world.
MarginEdge is offered in addition to BNY Mellons suite of derivatives-related services, Derivatives360, which includes trading and execution, collateral management and other middle-office outsourcing services, as well as custody, accounting and consolidated reporting. Derivatives360 also supplies outsourced cash collateral reinvestment, OTC trade affirmation and confirmation, independent (third-party) valuation, counterparty and investment manager reconciliation and lifecycle event management.
Global regulatory reforms are driving profound changes in the derivatives markets, making operational efficiencies, risk reduction and increased transparency the critical components in any derivatives margin process, said John Vinci, global head of Product Management and Strategy for BNY Mellon Broker-Dealer Services. MarginEdge helps market participants navigate the challenge of managing the costs and operational complexities linked to regulatory changes while meeting their required financial performance and goals.
(CG)