The International Securities Services Association (ISSA) released a new report identifying the challenges created by collateralization and the best practices relating to the use of assets transferred as collateral in the new post trade landscape.
The paper, Collateral Management – Best Practices for Cleared and Bi-laterally Traded Products, was compiled by ISSA’s Collateral Management Best Practices Working Group.
“The many regulatory and market changes in collateralization have become of paramount concern for asset owners and their agents,” said Josef Landolt, ISSA Chairman. “The new ISSA white paper draws on the valuable work of its member organizations to develop best practice recommendations for asset owners, investment managers and custodians.”
ISSA is a neutral non-profit association whose mission in part is to help develop and promote forward-thinking solutions that create efficiencies and mitigate risk within the global securities services industry.
Creation of the report involved a team of experts drawn from ISSA member firms and third parties under the lead of Angus Fletcher, Head of Market Advocacy, Global Transaction Banking, Deutsche Bank. Neil Henderson, Managing Director at The Depository Trust & Clearing Corporation (DTCC) was a member of the Working Group.
“The challenges in the collateral management space have escalated significantly over the past few years,” Henderson said. “Regulatory and marketplace drivers have made it increasingly necessary for asset owners and their agents to address the liquidity and risk of their collateral arrangements.”
Scope of ISSA's Report
- Chapter 1: Executive Summary
- Chapter 2: Background and Key Definitions
- Chapter 3 – 5: Best Practices regarding Collateral Protection, Default Management and Customer Communication / Reporting
- Chapter 6: Future Trends in Collateralization
- Chapter 7: Regulatory Overview as it pertains to collateral-takers and collateral givers in the European Union
- Chapter 8: Choice of hyperlinks to access current informational resources
- Chapter 9: Working Group Members
Fletcher and Henderson discuss the objectives and findings of the report in a video interview: http://www.dtcc.com/videos/issa-white-paper.aspx.