The Depository Trust & Clearing Corp (DTCC), Margin Transit Utility (MTU) is now connected with all of the major triparty agents iincluding Bank of New York (BNY) Mellon, BNP Paribas Securities Services, Clearstream, Euroclear, JP Morgan, SIX and State Street.
MTU enables users to efficiently enrich, settle, monitor and report matched collateral calls globally, while connecting to and sharing information with multiple counterparties including automated instructions for major triparty agents.
MTU’s Triparty Messaging service helps clients in complying with regulatory requirements such as BCBS-IOSCO’s Uncleared Margin Rules (UMR).
Currently, it said a number of clients are impacted by UMR Phases 4 and 5, while many firms that will fall into scope under UMR Phase 6, have or are planning to implement MTU to achieve seamless connectivity with triparty agents.
UMR involves the mandatory exchange and segregation of initial margin (IM) on non-cleared derivatives trades.
The first cluster of four covered those with an aggregate average notional amount (AANA) greater than €3 trn followed by €2.25 trn, €1.5 trillion and €750 bn.
The threshold dropped to an AANA of more than $50 for the 5 cohort and over $8 bn for those in phase 6.
Estimates from the International Swaps and Derivatives Association (ISDA) show that as many as 775 entities will be caught – which is well over double the number of entities in Phase 5.
MTU’s pre-integrated connectivity and standardised settlement messaging for all major triparty agents delivers a common infrastructure, eliminating the need for direct builds.
MTU also creates efficiencies for triparty agents by eliminating the need to onboard hundreds of clients in preparation for UMR Phase 6.
“We are pleased that we have achieved connectivity with all the major triparty agents in the global financial markets,” said Bob Stewart, executive director, Institutional Trade Processing at DTCC.
He added, “UMR Phase 6 is right around the corner. T For many firms caught by UMR Phase 6, the requirement to onboard to a triparty venue in order to receive collateral can be new and unfamiliar. This is where MTU core features and functionalities deliver a turn-key solution to the industry challenge.”
