Northern Trust reports that it is expanding its collateral management services for over-the-counter (OTC) derivatives trading. It says the new functionality will enable asset managers and institutional investors to outsource key aspects of regulatory compliance to Northern Trust and optimize collateral selection – driving efficiencies in how they meet margin obligations.

Northern Trust says the Margin Segregation Service will include new capabilities that streamline complex processes for meeting uncleared margin rules, such as undertaking industry-standard electronic settlement messaging and providing advanced collateral reporting.

It adds that clients can take advantage of the service to pledge assets from their trading account and place them into segregated accounts for each broker, thereby retaining their investments with a single asset servicing provider for optimal efficiency, consolidated record-keeping and oversight.

Additionally, Northern Trust has partnered with risk and collateral management services expert AcadiaSoft to provide an outsourced solution for collateral optimization calculating clients' initial margin obligations, issuing margin demands to clients' brokers, and determining if and when margin is to be transferred.

With this service, clients will have the ability to optimize collateral selection, using algorithmic technology to identify their best assets available to meet regulatory eligibility requirements. It will allow only optimal assets to be deployed to meet margin obligations – helping optimize investment performance.

Judson Baker, derivatives product manager at Northern Trust, said: "Our clients' use of derivatives often falls within the threshold of heightened global derivatives regulation, requiring resource-intensive tasks to support compliance. By outsourcing these complex and onerous functions, they can draw on our expertise and advanced technology – negating the need for costly investment in their systems. They can also minimize the value of their assets locked up as collateral by using our optimization solution."

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Northern Trust reports that it is expanding its collateral management services for over-the-counter (OTC) derivatives trading. It says the new functionality will enable asset managers and institutional investors to outsource key aspects of regulatory compliance to Northern Trust and optimize collateral selection – driving efficiencies in how they meet margin obligations.

Northern Trust says the Margin Segregation Service will include new capabilities that streamline complex processes for meeting uncleared margin rules, such as undertaking industry-standard electronic settlement messaging and providing advanced collateral reporting.

It adds that clients can take advantage of the service to pledge assets from their trading account and place them into segregated accounts for each broker, thereby retaining their investments with a single asset servicing provider for optimal efficiency, consolidated record-keeping and oversight.

Additionally, Northern Trust has partnered with risk and collateral management services expert AcadiaSoft to provide an outsourced solution for collateral optimization calculating clients' initial margin obligations, issuing margin demands to clients' brokers, and determining if and when margin is to be transferred.

With this service, clients will have the ability to optimize collateral selection, using algorithmic technology to identify their best assets available to meet regulatory eligibility requirements. It will allow only optimal assets to be deployed to meet margin obligations – helping optimize investment performance.

Judson Baker, derivatives product manager at Northern Trust, said: "Our clients' use of derivatives often falls within the threshold of heightened global derivatives regulation, requiring resource-intensive tasks to support compliance. By outsourcing these complex and onerous functions, they can draw on our expertise and advanced technology – negating the need for costly investment in their systems. They can also minimize the value of their assets locked up as collateral by using our optimization solution."