South Africa’s central securities depository, Strate, has partnered with FinTech firm CloudMargin to boost tri-party messaging and collateral efficiency in the country.
It is hoped the move will increase automation as buy- and sell-side participants use cloud-based technology to exchange tri-party messaging for collateral instructions, settlements and confirmations.
Under terms of the agreement market participants will also be able to use collateral held at Strate to cover margin calls in the OTC derivatives market.
“We are delighted to partner with CloudMargin to provide a fully integrated, cost-effective and powerful collateral management capability to the South African market,” said Steve Everett, general manager of Strate collateral management services.
“This comes at a time when firms here are preparing to meet the requirements of the non-cleared OTC derivatives margin regulation due to take effect on 1 September, which will require enhanced collateral management capability from both the buy-side and the sell-side.”
The agreement is the latest partnership for CloudMargin following its partnership with SmartDx earlier this year allowing buy-side derivatives traders to repaper their OTC agreements.
“We are continuing to build an inter-connected network of organisations globally that give clients one-stop access to a broad range of collateral management and other related services for cleared and uncleared derivatives transactions,” said Lee McCormack, head of strategy at CloudMargin.