DTCC And Euroclear Dissolve GlobalCollateral JV01.15.2020
Since DTCC-Euroclear GlobalCollateral was formed in 2014, we have been very pleased with industry receptiveness to the Margin Transit Utility (MTU) and the Collateral Management Utility (CMU).
The market is in need of collateral management solutions that streamline and automate processes while enabling firms to meet emerging regulations. However, as the market has continued to evolve, we regularly assess the most efficient way to deliver the highest-quality services to support clients.
As a result, DTCC and Euroclear have jointly decided to separate the two products and dissolve the joint venture, DTCC-Euroclear GlobalCollateral operating entity, effective March 10, 2020. DTCC and Euroclear are carefully managing this process to ensure the transition is seamless and that there is no impact to clients.
DTCC will integrate MTU into its Institutional Trade Processing (ITP) business to provide more holistic support for firms, and Euroclear will become the sole owner of the GlobalCollateral entity offering the CMU. DTCC and Euroclear maintain a strong working relationship, and the firms will continue to collaborate closely on the development of both MTU and CMU to meet the industry’s needs to manage collateral movements across borders.
Same-day execution reduces clients’ risk and resources as optimization can take up to 5 days.
Initial margin for centrally cleared markets increased by $300bn over March 2020.
More buy-side firms will be caught by the new rules.
Exposures and margin calls can be monitored in real-time.
Reducing costs associated with funding and liquidity is becoming increasingly important.