State Street is set to launch a three-party guarantee service for its buying customers ahead of the fifth phase of the Uncompensated Margin (UMR) rules in September.
The US bank is currently onboarding buy-side clients as part of a pilot phase to build the new three-party solution that will complement its established suite of collateral solutions.
Staffan Ahlnerwho recently took over as global head of collateral at State Street, is spearheading the initiative and says the tri-party product is part of the bank’s strategy to deliver end-to-end service for optimization and warranty management.
State Street has a pedigree in collateral management dating back more than 20 years, but this will be the first time it has offered three-party services.
Collateral Service is part of State Street’s Collateral Funding and Transformation Division, which includes the Funding and Analytics Division headed by Travis Keltner. It is designed to create a holistic approach to finance and transformation solutions for buy-side institutional clients.
Ahlner tells SFT that managing collateral as part of an effective post-trade activity is no longer optional for many buy-side firms and today’s announcement of a move to triparty is the latest step in State Street’s overall strategy to deliver efficiencies to customers in an increasingly regulated environment.
Speaking to SFT recently, he explained that the Tripartite Collateral Platform will work as a pre- and post-trade collateral optimization engine.
“It’s part of the same platform as our other solutions to make it easy for buy-side businesses to choose new tools down the road, such as our securities lending or peer-to-peer facilities or access to a sponsored repo,” he said.
State Street works with several fintech companies and providers as part of its overall collateral strategy, including Vermeg, Transcend Street, and Cassini Systems, among others.
The full conversation with Staffan Ahlner is free to read in the latest issue of Securities Finance Times.
