A non-event. That is how European securities depositories; their bank and brokerage participants, fund managers and software vendors describe the migration of over two dozen European markets to a two-day settlement cycle on October 8. Yet they are all realizing that they must keep up the good work in ensuring seamless middle office procedures. Relying […]
Collateral Management: Is Access Really King?
When it comes to managing collateral, fund managers can just forget about all the doomsday talk of a shortfall. There is enough to go around — and to fulfill a multitude of regulatory requirements — if only it could be easier to access it. Or so says a new study supported by the US Depository […]
Mind the Gap: Brokers Address US-European Settlement Discrepancy
Europe’s move to a two-day settlement cycle in October will cause a lot more stress for broker-dealers than just trying to communicate with their fund managers more quickly. The reason: their clients among US asset managers may have difficulty funding more of their purchases of European securities in at least ten European markets come October 6. From that […]
Collateral Management: Shifting from Cost to Profit Center
Once considered a dreary administrative task, collateral management is moving to high visibility for fund management shops, forced by new regulations to rethink their the use of the assets that back numerous transactions. Now a target for cost control with the ultimate goal of wringing revenue out of it, collateral management is coming out of the back room. “Depending on the types of […]
T+2: Coming to US Fund Managers
How much difference can it make that a US trade group representing mutual fund advisors adds its support to longstanding efforts by the Depository Trust & Clearing Corp. to move the US to a two-day settlement cycle? Enough to make it clear that the ball is now rolling, and deadlines are being considered. The […]
FINRA: Even Tougher Margining Rules
US broker-dealers and their fund manager customers that deal in forward-settling agency mortgage-backed securities or similar asset classes better prepare for even more legal and operational stress. The Financial Industry Regulatory Authority (FINRA) has just come up a set of far more rigid and comprehensive rules than guidelines from a committee of the Federal Reserve Bank of New York, […]
Fund Managers: Get Ready for Margin Call Tsunami
Five hundred to one thousand percent. That’s the eye-popping prediction of the coming increase in margin calls in a new report from US market infrastructure Depository Trust & Clearing Corp. (DTCC), “Trends, Risks and Opportunities in Collateral Management.” The trigger: new regulations and recommendations requiring far more transactions in far more asset classes to be collateralized. Relying on […]
Margin Standards for TBAs May Edge Funds Out of the Market
Despite a six-month reprieve from collateralizing their US forward-settling agency mortgage-backed securities trades, many fund managers may be dismally unprepared for new margining standands, and shut out of the market. The answer won’t come easy or cheap: either upgrading or installing collateral management systems will be required. Then comes the cumbersome process of redrafting contracts or writing […]