DTCC-Euroclear Global Collateral Ltd (GlobalCollateral), a joint venture of The Depository Trust & Clearing Corporation (DTCC) and Euroclear, today announced the launch of the Inventory Management Service (IMS), a transformative solution that enables market participants to seamlessly mobilize securities from the U.S. to Europe for use as collateral amid rising demand for high-quality securities to back trades. With IMS, financial institutions can now optimize collateral across two of the largest global market infrastructures servicing a combined $78 trillion in assets.
The launch of IMS fulfils one of the joint venture’s key goals of delivering cross-border collateral mobility, and is part of GlobalCollateral’s ongoing commitment to establishing a key market utility that delivers increased visibility, mobility and efficiency to highly-fragmented and complex collateral management processes.
GlobalCollateral IMS enables a participant to use their Depository Trust Company (DTC) eligible securities in the U.S., including U.S. equities, corporate bonds and asset backed securities, for collateral purposes within Euroclear. With IMS, dealers can consolidate assets across markets and asset classes, and deploy those assets to satisfy exposures globally. The new service satisfies market participants’ need to efficiently and cost effectively move dollar assets into Europe, as well as significantly advances the development of global collateral optimization.
IMS was created to address the challenges of consolidating collateral pools and accessing a broader range of counterparties. The deployment of the service is a major step towards creating global collateral linkages and will help to alleviate the liquidity, regulatory and risk challenges that the industry has been facing.
Mark Jennis, Executive Chairman of GlobalCollateral, said: “The launch of IMS demonstrates what we, as an industry, can achieve when we collaborate with each other. As the demand for high-quality collateral continues to grow, IMS provides critical access to new collateral pools.”
Michael Shipton, Chief Executive of GlobalCollateral, said: “This is a major step for GlobalCollateral. IMS delivers one of the joint venture’s key objectives – to address what market practitioners have long recognized as a critical need to be able to directly mobilize and use collateral across borders and to move dollar assets into Europe. With IMS, firms have greater control and flexibility in the way they utilize their assets, while benefiting from improved efficiency.”
DTCC-Euroclear Global Collateral Ltd (“GlobalCollateral”) is a joint-venture between The Depository Trust & Clearing Corporation (DTCC) and Euroclear, two of the world's largest post-trade infrastructures. Through an open architecture infrastructure designed to streamline collateral processing globally, the two GlobalCollateral utilities provide both OTC derivatives and financing solutions that deliver transparency, collateral mobility, efficiency and security.
The Collateral Management Utility: its Inventory Management Service re-positions inventory seamlessly between The Depository Trust Company (DTC) and Euroclear Bank for margin and financing transactions and its Collateral Management Service automates all collateral management tasks.
The Margin Transit Utility: enables straight-through processing of margin calls and provides improved liquidity and operational risk management.