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James Malgieri, executive vice-president, global collateral services at BNY Mellon

BNY Mellon to provide tri-party collateral management services for CME Clearing Europe

BNY Mellon has been appointed to provide tri-party collateral management services for CME Clearing Europe, the European multi asset class clearing house.

Services will be provided through MarginEdge, BNY Mellon’s derivatives margin management service for listed, OTC and bi-lateral OTC derivatives.

MarginEdge provides clients, clearing members and central counterparties (CCPs) with real-time views on location and positions in respect of margins and collateral.

Following CME Clearing Europe receiving regulatory approval of the new tri-party agreement for clearing members’ business, those members will be able to manage collateral through BNY Mellon.

James Malgieri (pictured), executive vice-president, global collateral services at BNY Mellon, says: “Financial institutions are facing enormous challenges brought about by the EMIR and Dodd-Frank regulatory schemes and rapidly evolving regulatory structure in Europe and the US. Central clearing is a cornerstone of those changes and has seen attention increasingly focused on collateral needs.

“Collateral is a critical part of the risk mitigation framework of these new regulations. However, it brings its own challenges around selection, valuation and time-sensitive collateral delivery. BNY Mellon has for many years provided tri-party collateral management services for traditional repo transactions and has continued to evolve our model to meet changing requirements in the new CCP environment.”

Andrew Lamb, chief executive officer at CME Clearing Europe, says: “The requirement to clear OTC derivatives centrally is a key focus for both sell-side and buy-side firms. We feel that flexibility and certainty in collateral arrangements are necessary for all parties and that BNY Mellon’s tri-party collateral management service offers those elements. CME Clearing Europe is pleased to have worked with BNY Mellon to introduce this new feature of our clearing arrangements.”

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