Survey Finds Only 4% of Financial Market Participants Have Completed Their Preparations for Collateral Management and Central Clearing

Share Article

Collateral systems provider 4sight and business and IT consultancy Rule Financial have published a new research paper on buy side collateral management. The paper, Buy Side Collateral Management: Challenges and Opportunities, is based on research indicating that many financial firms are still to begin preparations for collateral management of centrally cleared derivatives.

Buy Side Collateral Management: Challenges and Opportunities

As ever, in solving the collateral conundrum, there is no substitute for mobilising as soon as possible.

4sight and Rule Financial conducted a survey asking 25 firms across the buy side and sell side how prepared they were for the new operational and technological complexity around collateral management of cleared OTC derivatives.

The survey found that 4% of respondents had completed preparations while 46% were in the process of implementing their target operating model. A further 27% had defined their target operating model but had not started implementing it. Worryingly, 23% had not yet begun to define their target operating model.

The paper details the new challenges around the collateral management process. In addition, it looks at how buy side firms can ease the transition to the new cleared collateral model. The paper also discusses the technology solutions available in the market to support the new more demanding margining process.

Click here to access the whitepaper.

“As ever, in solving the collateral conundrum, there is no substitute for mobilising as soon as possible,” comments Martin Seagroatt, one of the paper’s co-authors. “For those who have yet to decide on a collateral management strategy, the risks are becoming even greater for operating with a substandard, non-optimal system; incurring the high costs associated with non-compliance and inefficient tactical solutions. Firms that take an active approach and see collateral management as a core competency will outperform those taking a more passive stance.”

About 4sight Financial Software

4sight Financial Software is an independent software solutions provider to financial institutions, with eighteen years of experience and offices and clients worldwide.

4sight’s customer base includes a full spectrum of market participants from custodial lenders, agents and principal intermediaries, to direct lenders and global broker dealers. Clients in sixteen countries on four continents use 4sight’s software to meet their business needs and 4sight offers the reliability and experience of a company with a proven track record.

4sight’s product range includes solutions for securities lending and repo trading, cross asset class collateral management and collateral optimisation, settlement and market connectivity. 4sight’s software helps financial institutions to improve efficiency, reduce costs, automate manual processes and control risk.

4sight also provides project management, consultancy services and customer support through its global network of offices.

For further details, please visit:

About Rule Financial

Rule Financial is a leading independent provider of business and IT services to the world’s foremost financial institutions.

Our specialists work alongside their counterparts at leading investment banks, central counterparties, exchanges, asset managers and other financial institutions, helping to lower costs, improve productivity and extract the maximum business value from IT investments.

Headquartered in London, we provide strategic consultancy from our offices located at the heart of the European and North American financial markets, and deliver technical design, implementation and support services from nearshore facilities in Poland, Spain and Costa Rica.

To read more about Rule Financial and our experience in collateral management, visit our web-site:

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Martin Seagroatt
Visit website