50 market participant firms are leveraging MTU to automate the margin call process and reduce risks
New York/London/Hong Kong/Singapore/Sydney, July 21, 2020 ‒ The Depository Trust & Clearing Corporation (DTCC), the premier post-trade infrastructure for the global financial services industry, today announced that its Margin Transit Utility (MTU) community has grown to 50 firms representing thousands of Credit Support Annexes (CSAs), with users including leading dealer and buy-side organizations around the world.
Given today’s volatile markets and the increase in margin call demands, coupled with the final phases of uncleared margin rules (UMR) rules for over-the counter (OTC) derivatives, an increasing number of firms are actively looking to replace manual margin call processes with automation. By automating the margin call process, MTU enables firms to efficiently validate, enrich, settle, report and monitor matched collateral calls globally while connecting to and sharing information with multiple counterparties.
“As the markets have experienced unprecedented increases in volatility and margin call demands, we’ve seen firsthand the benefits of MTU and a fully-automated margin call process on our first, recently onboarded accounts,” stated Krzysztof Wierzchowski, Director of Global Trade Services at Franklin Templeton, one of the first participant firms to join the MTU community. “The solution has not only enabled us to meet the challenges of today, reducing risk and increasing efficiency at a time of uncertainty, but also positions us well to meet the regulatory demands of tomorrow.”
DTCC’s MTU was created to improve settlement efficiency and reduce operational complexity and risk for collateral call processing. The service includes connectivity from AcadiaSoft’s Margin Manager and DTCC’s ALERT for enriched standing settlement instructions (SSIs), connectivity to custodians and tri-party providers, confirmation of settlement, and standardized end-of-day reporting. It also includes connectivity to a number of complementary collateral offerings, including CloudMargin, VERMEG (Colline) and TriOptima (triResolve Margin).
“MTU aims to deliver a streamlined margin settlement process, automating key processes with our counterparties. Through broader MTU participation we expect this to be integral to our ability to improve efficiency and remove complexity in tying the margin call to the settlement process and speeding reconciliations,” stated Rob Marro, Executive Director at Morgan Stanley.
“We are pleased to see the continued adoption of Margin Transit Utility, as firms seek to automate the margin call process at a time of increased margin calls and as UMR phases 5 and 6 loom on the horizon,” stated John Straley, Executive Director, Institutional Trade Processing at DTCC. “As a critical market infrastructure provider, our objective is to help firms efficiently comply with upcoming regulation while alleviating the pressures that spikes in margin call volume can bring, especially during today’s volatile markets.”
With over 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From operating facilities, data centers and offices in 15 countries, DTCC, through its subsidiaries, automates, centralizes and standardizes the processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management, data reporting and information services across asset classes, bringing increased security and soundness to financial markets. In 2019, DTCC’s subsidiaries processed securities transactions valued at more than U.S. $2.15 quadrillion. Its depository provides custody and asset servicing for securities issues from 170 countries and territories valued at U.S. $63.0 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes over 14 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, Twitter, YouTube and Facebook.