HSBC launches OTC collateral clearing

HSBC towerHSBC Securities Services, one of Europe’s largest custody banks, is looking to build its fund management client base with a collateral clearing product designed to help funds deal with incoming requirements for central clearing. G20 swap clearing reforms now extending into Europe and Asia place greater demand on buy-side firms to better manage and mobilise their collateral, the firm says. In Europe, the European Market Infrastructure Regulation, or Emir, places new obligations to clear over-the-counter (OTC) derivatives trades through a central counterparty and these obligations are due to come into effect for most investment management firms in December 2016. HSBC’s automated collateral management service includes calculation and verification of margins and interest as well as automated margin payments. Craig Cowe, head of collateral management product, at HSBC Securities Services, said: “Incoming regulations to centrally clear OTC derivatives mean that it’s crucial for investment managers to know where their assets are and what they can be used for.” HSBC said many institutional investors have viewed collateral management as a back-office activity, but that the requirements mean the process is becoming more firmly integrated with the front office. ©2016 funds europe

Sponsored Profiles

SPONSORED FEATURE: Alternative thinking

Mar 16, 2017

Portfolio Manager Davide Cataldo discusses the results of the Pioneer Investments’ survey on liquid alternatives and how investors can be encouraged to increase their allocation.

SPONSORED FEATURE: Interest rate risk hedging: Swapping to other options

Mar 16, 2017

Heightened margin requirements for cleared and uncleared OTC derivatives pose a challenge for legitimate hedging activities and are driving financial institutions to explore alternative hedging...

SPONSORED FEATURE: Why blockchain could be the fund industry’s next Ford Model T

Mar 16, 2017

Blockchain aims to radically change the way investors can access funds, says Olivier Portenseigne, Managing Director and Chief Commercial Officer of Fundsquare.

SPONSORED FEATURE: Open architecture: In need of protection

Mar 16, 2017

Greater efficiency must be embraced to ensure regulatory changes do not destroy choice for fund buyers, says Bernard Tancré of Clearstream.

Executive Interviews

CEO INTERVIEW: Munro gains three-year track record

Mar 16, 2017

Aviva Investors’ annual results this month were the third set since Euan Munro took over as CEO. Nick Fitzpatrick speaks to him about the ‘Aims’ fund at the heart of the firm’s outcome strategy.

DISTRIBUTION INTERVIEW: Tales of the unexpected

Mar 16, 2017

Laurence Terryn, a fund selector at Candriam, tells David Stevenson how the twists and turns of the past year’s macro environment flavoured her approach to fund selection.

Roundtables

ASSET SERVICING ROUNDTABLE: Under pressure

Mar 07, 2017

Funds Europe speaks to leading Luxembourg industry figures about the growing regulatory demands on asset servicers and how to remain profitable in spite of major investments in technology.

SEC LENDING ROUNDTABLE: Both a borrower and a lender be

Jan 11, 2017

Industry heavyweights, including agent lenders, discuss issues affecting the securities lending sector such as regulation and the types of collateral being used.