Bank of New York Mellon has developed a netting service called Derivatives Collateral Net, which enables derivatives dealers to post only their net obligations against all other partici
Bank of New York Mellon has developed a netting service called Derivatives Collateral Net, which enables derivatives dealers to post only their net obligations against all other participants in the system.
The service, which the company is currently enrolling participants in, automatically aggregates and nets overall collateral obligations, minimising the collateral dealers are required to post and reducing the risks and costs associated with derivative transactions.
‘Derivatives Collateral Net represents the implementation of the International Swaps and Derivative Association’s strategic vision for dramatically reducing the operational challenges associated with the margin process between counterparties,’ says Art Certosimo, an executive vice-president and head of broker-dealer services at Bank of New York Mellon.
‘We’re making the process more efficient without affecting the fundamental bilateral nature of the credit relationship between the parties. This service spotlights our unique ability to utilize our collateral management expertise and technology to anticipate and serve the emerging needs of our derivatives dealer clients.’
The service represents a collaborative effort between Bank of New York Mellon’s office of innovation and its broker-dealer services business. The office of innovation provides the framework and resources necessary to accelerate the development of promising new products and services that support client needs.
‘As the global capital markets expand and evolve, our commitment to researching and developing innovative services will provide significant benefits to our clients and strengthen our competitive position around the world,’ says Kurt Woetzel (pictured), senior executive vice-president and chief information officer at Bank of New York Mellon. ‘Derivatives Collateral Net is the latest example of a new service developed in-house that improves our ability to service our clients.’
