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Collateral management likely to consolidate 

October 16, 2015

Mark Dugdale, Secruities Lending Times

New regulations and changes in financial markets mean consolidation in collateral management is highly likely, according to a report from BNY Mellon and The Field Effect.

The new report, Collateral Management: A Review of Market Issues, argues that consolidation is “a highly likely outcome” and collateral management will evolve from being primarily a process of managing assets for margin purposes, to a position where much greater consideration is required to manage assets.

The possibility of a shortfall of market collateral, potential changes that firms can make to existing account structures, systems and services, the role of third-party service providers in helping market participants to manage collateral effectively, and the future shape of collateral management are all discussed in the report.

Key challenges in collateral management identified by the report include compliance with new regulations governing cleared and non-cleared over-the-counter derivatives.

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