HSBC Securities Services has launched an over-the-counter (OTC) clearing collateral service, to help clients meet requirements of the G20 swap clearing reforms.
The swap clearing rules, which are set to come into force this summer in Europe, will lead to a need for automated collateral management services. The buy-side will be affected by the rules from December 2016 onwards.
HSBC’s OTC clearing collateral service provides an “independent and highly automated collateral management service” with calculation and verification of margins, interest and automated margin payments.
Craig Cowe, head of collateral management product at HSBC Securities Services, said the “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.”
Cowe added that HSBC has implemented “collateral processing hubs” across Europe and Asia, to ensure clients keep with the regulatory reforms.
He explained to Global Custodian that the service will be as important to Asian clients as it will be to Europe.
“Many incoming regulations, such the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ framework for margin requirements, have global implications,” Cowe said.
“We therefore expect these to impact investment management firms in Asia as much as the rest of the world. Furthermore, given the high degree of manual processing in many Asian markets, firms are facing a significant challenge in light of the automation that is required for central clearing.”
HSBC launches OTC clearing collateral service
Automated collateral management will be key under G20 swap clearing rules, due to come into effect for most firms in December this year.