Collateral managers must regroup to tackle incoming regulation
10 November 2017 London
Image: Shutterstock
Centralisation of the collateral function should be the highest priority for collateral managers in 2018 in order to ward off demanding collateral rules, according to Ted Allen, director of business development at Apex Collateral.
Allen explained that, due to incoming regulation requirements, firms will likely have to 鈥渕ake the transition from tactical solutions 鈥� [for compliance] to a more strategic approach鈥�.
In particular, the implications of the of the second Markets in Financial Instruments Directive (MiFID II), which is due to go live on 3 January next year, will be front and centre in managers鈥� minds going forward.
Allen also predicted that 鈥渃oping with rising interest rates and increased collateral requirements will also be a key topic for the year ahead鈥�.
Despite the fast approaching implementation date, Allen admitted that 鈥渢here鈥檚 still a lot of questions around it [MiFID II]鈥�, including how the latest requirements will blend with other incoming frameworks, such as over-the-counter margin rules for derivatives.
He said: 鈥淚t will be interesting to see if there鈥檒l will be another increase in volumes, caused by the inclusion of FX forwards under the OTC derivatives margining regime鈥�.
Despite industry uncertainty, Allen clarified that Apex was prepared for the implementation of MiFID II and that the firm had 鈥渄one a lot of work with clients to help them get compliant鈥�.
Allen said: 鈥淸Apex has a] highly efficient collateral operations tool to provide full straight-through processing of the margin call process鈥� and that 鈥渙ur clients experience significant efficiency gains from deploying Apex Collateral.鈥�
Subscribe for free to the next issue of Securities Lending Times, published on 14 November, to read this article in full.
Allen explained that, due to incoming regulation requirements, firms will likely have to 鈥渕ake the transition from tactical solutions 鈥� [for compliance] to a more strategic approach鈥�.
In particular, the implications of the of the second Markets in Financial Instruments Directive (MiFID II), which is due to go live on 3 January next year, will be front and centre in managers鈥� minds going forward.
Allen also predicted that 鈥渃oping with rising interest rates and increased collateral requirements will also be a key topic for the year ahead鈥�.
Despite the fast approaching implementation date, Allen admitted that 鈥渢here鈥檚 still a lot of questions around it [MiFID II]鈥�, including how the latest requirements will blend with other incoming frameworks, such as over-the-counter margin rules for derivatives.
He said: 鈥淚t will be interesting to see if there鈥檒l will be another increase in volumes, caused by the inclusion of FX forwards under the OTC derivatives margining regime鈥�.
Despite industry uncertainty, Allen clarified that Apex was prepared for the implementation of MiFID II and that the firm had 鈥渄one a lot of work with clients to help them get compliant鈥�.
Allen said: 鈥淸Apex has a] highly efficient collateral operations tool to provide full straight-through processing of the margin call process鈥� and that 鈥渙ur clients experience significant efficiency gains from deploying Apex Collateral.鈥�
Subscribe for free to the next issue of Securities Lending Times, published on 14 November, to read this article in full.
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