EquiLend, a global technology company for the securities finance, collateral and swaps industries, has launched its new Collateral Trading service globally, following an intensive pre-testing phase.Clients from the Americas and Europe are now active on the service, with users in Asia set to join in April. Many of these counterparties were involved in the EquiLend Collateral Trading Working Group, which was formed in July 2019.
EquiLend Collateral Trading offers funding and financing desks a centralised way to execute and manage trade structures with their counterparties. The new workflow supports collateral trade negotiation, execution and management of lifecycle events, such as substitutions and transaction rolls.
The initial rollout supports collateral upgrade and downgrade trades. In this market, a firm in need of high-quality liquid assets (HQLA)—to meet regulatory capital requirements or for balance sheet efficiency—typically trades lower-grade collateral plus a fee to a counterparty in exchange for HQLA, under a negotiated trade structure.
In addition to the core functionality of the platform that is now live, EquiLend is already planning further enhancements for an upcoming release. These include additional collateral trade types and straight-through processing capabilities, including connectivity to EquiLend Spire’s books and records and inventory management modules.
Brian Lamb, CEO of EquiLend, says: “In the same way NGT revolutionised securities finance trading, and Swaptimization brought unparalleled liquidity and efficiency to the swaps industry, we believe EquiLend Collateral Trading is set to transform collateral trading and management. We are thrilled to be introducing this innovative new technology to a market in desperate need for efficiency and automation.”
Paul Lynch, Global Head of Products, EquiLend, says: “Collateral Trading not only offers clients access to a centralised pool of liquidity, but it enables them to manage lifecycle events throughout the tenor of their transactions. As a front-end collateral management system, Collateral Trading offers firms greater liquidity, improved efficiency and price discovery, which is unique in this market.”
With unique transaction identifiers (UTI), legal entity identifiers (LEI) and transaction timestamps produced at the point of trade, EquiLend Collateral Trading also assists clients with their Securities Financing Transactions Regulation (SFTR) and Central Securities Depositories Regulation (CSDR) obligations.
