State Street has been appointed to provide collateral management services to HSBC Investments in the UK. State Street has developed collateral management services in response to increasing demand from institutional investors using derivatives as a normal part of their portfolio management activities. The services will help HSBC manage, track and provide reports on collateralized transactions.
The news comes just a few weeks after State Street announced that its relationship with Paternoster has been extended to include collateral management services. Paternoster is an insurance company formed to take responsibility for the risks associated with companies’ final salary or defined benefit pensions schemes.
“We continue to see a surge in the use of derivatives by investment managers,” says Wade McDonald, head of customer management for State Street’s investor services team in the UK, Middle East and Africa. “Given the operational complexities associated with these products, State Street’s collateral management services offer customers a simple, secure and flexible way to achieve greater efficiency, so they can concentrate on growing their investment strategies and distribution networks.”
State Street’s collateral management reporting service aims to enable users to define customized parameters, including eligibility of collateral, margin requirements and concentration limits.