Collateral Management

Collateral Management has become the collective term for risk mitigation for a range of institutions.  The risk mitigation covers both exposure management and provision for liquidity risk and its increased activity has been driven by the regulation that has emerged in the aftermath of 2007-8 financial crisis.

Insights

The industry as a whole irrespective of organisation type face the following collateral management challenges:-

  • Collateral set standardisation and pricing
  • Collateral mobilisation and transformation
  • Inventory management – overarching single pool view irrespective of custody location
  • Valuation
  • Eligibility
  • Issuer/currency/domicile exposure across triparty agents
  • Multi-location & multi-entity Liquid Asset Buffer adequacy (Treasurers) – Internal Liquidity Adequacy Assessment Process including stress testing
  • Rehypothecable vs non-rehypothecable
  • Collateral segregation
  • Cash collateral
    • Commingled & segregated funds (agent lenders)
    • Cashpool management & billing
  • Regulation
    • OTC derivative margining (EMIR / BCBS IOSCO)
    • BASEL III (LCR, CAR, NSFR,RWA)
    • SFTR

How Delta Capita can help

Advisory and delivery services

  • Delta Capita provides collateral practitioners with sell-side, buy-side and market infrastructure expertise
  • They have insight of the cost and efficiencies that firms face and can provide
    • Target Operating Model formulation
    • Optimised application architecture
    • System/Vendor selection evaluation and due diligence
    • Commercial negotiation and contracting
    • Delivery expertise including programme leadership
    • Ongoing provision of solutions to meet service provider integration, business and regulatory change

Outsourcing and managed services

For asset managers, Delta Capita provide an alternative to vendor or in-house solutions by integrating an outsourced solution to assist with exposure management, triparty long box management, collateral pricing and collateral valuation to a client’s portfolio management system. The collateral management managed service is delivered via a blended solution of on-site, off-site and offshore services through our London and Johannesburg offices, optimising quality and responsiveness and ensuring suitable face-to-face contact for our clients. We focus on functions where high touch, specialist skills are required on-site and complemented by off-site and offshore service offerings.

Value Propositions – Collateral Management

We develop various value propositions for our clients. The following illustrates the breadth of our capability across Collateral Management:

Managing Principal
Jonathan Adams

Jonathan Adams

“Delta Capita can assist with optimising your business model and application architecture. Additionally, we provide an outsourced model where you can benefit  from a ‘pay for use’ managed service.”