BNP looks to standard Swift messages for improved collateral protection
The bank has set up “Margin Project”, planning to integrate Swift’s standardised tri-party collateral messages to ensure full compliance with the upcoming regulatory requirements on OTC transaction, mitigation of counterparty risk, asset safety and cash reinvestment facilities. ‘Margin Protect’ will also provide straightforward and more efficient management of all securities collateral operations, from instruction to substitution and monitoring,
Philippe Ruault, head of clearing settlement and custody products at BNP Paribas Securities Services, said: “The more stringent requirements and the expected increase in volumes of collateral exchanged will make it difficult for firms to cope with a manual process still largely reliant on fax and emails”.
Hélène Virello, head of collateral management at BNP Paribas Securities Services, said: ” ‘Margin Protect’ forms part of BNP Paribas’ comprehensive set of collateral management solutions, encompassing collateral management, sourcing, financing and protection. All services are modular, yet integrated within the bank’s custody offer and are offered in the US, Europe and Asia across all client segments.”
Alain Raes, chief executive, EMEA and Asia Pacific, Swift, said: “We are delighted to be working with a leading custodian such as BNP Paribas to help its clients to improve efficiency in the critical area of collateral management. We are confident that this development will boost the systematic use of the ACA for the benefit of our clients and their counterparties.”
Collateral protection has recently moved up the priority agenda, becoming one of the top concerns for both market players and regulators. Over ten regulations, in particular Dodd-Frank and EMIR, currently have a direct impact on how to manage and protect collateral; meaning clients are facing considerable challenges in terms of accessing and managing collateral efficiently.