Baton Systems and J.P. Morgan to automate derivatives margin payments
15 November 2019 New York
Image: Shutterstock
Baton Systems has teamed up with J.P. Morgan to develop a distributed ledger technology platform to help redeploy cash and collateral balances more effectively to global clearinghouses.
The new service addresses the challenge of having to tie-up excess funds across the clearing workflow by integrating settlement instructions for custodians and other funding sources into existing optimisation and treasury systems.
In addition, it eliminates the need to coordinate multiple systems, reports, and spreadsheets.
The resulting end-to-end automation of the margining and collateral workflows provides visibility of the asset flows between J.P. Morgan and clearinghouses, with complete audit trails and real-time notifications, reducing the need to pre-fund margin payments under the current market infrastructure related to margin settlements.
Anthony Fraser, head of global clearing operations and trading cost management at J.P. Morgan, explained that the technology will reduce the time needed to process the entire collateral workflow from hours to near real-time.
Fraser said: 鈥淲e鈥檙e already seeing faster, more efficient payments, reconciliation and reporting for all parties in the collateral lifecycle.鈥�
Arjun Jayaram, CEO and founder at Baton Systems, said: 鈥淥ur collaboration with J.P. Morgan is accelerating the movement of assets. This is a truly ground-breaking solution that removes the need for manual intervention in the collateral process by integrating with financial institutions鈥� collateral and cash systems, leaving their existing processes and systems in place.鈥�
The new service addresses the challenge of having to tie-up excess funds across the clearing workflow by integrating settlement instructions for custodians and other funding sources into existing optimisation and treasury systems.
In addition, it eliminates the need to coordinate multiple systems, reports, and spreadsheets.
The resulting end-to-end automation of the margining and collateral workflows provides visibility of the asset flows between J.P. Morgan and clearinghouses, with complete audit trails and real-time notifications, reducing the need to pre-fund margin payments under the current market infrastructure related to margin settlements.
Anthony Fraser, head of global clearing operations and trading cost management at J.P. Morgan, explained that the technology will reduce the time needed to process the entire collateral workflow from hours to near real-time.
Fraser said: 鈥淲e鈥檙e already seeing faster, more efficient payments, reconciliation and reporting for all parties in the collateral lifecycle.鈥�
Arjun Jayaram, CEO and founder at Baton Systems, said: 鈥淥ur collaboration with J.P. Morgan is accelerating the movement of assets. This is a truly ground-breaking solution that removes the need for manual intervention in the collateral process by integrating with financial institutions鈥� collateral and cash systems, leaving their existing processes and systems in place.鈥�
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