Regulations such as the Basel III accords, the Dodd-Frank Act and EMIR significantly impact demand for quality collateral, which is expected to increase year-on-year as more market participants enter the cleared markets. This report examines the effect of global regulations on collateral supply and demand and the current issues faced by operational teams in daily collateral management. The report also details the key considerations for a sound collateral optimisation solution. For more information, please visit: research.greyspark.com

capital markets intelligence

Lack of global collateral inventory

Regulations increasing global

demand for collateral

Fragmented technology

infrastructure

Siloed operational structure

Reliance on manual processes

Lack of an audit trailS

election of op

timal

nettin

g strateg

y

Sele

ction o

f optim

al a

ccount

seg

regatio

n o

ptio

ns

Lack

of

auto

mate

d r

eport

ing

Sta

le m

arke

t dat

aLe

gal a

gree

men

ts n

ot fed

into

T&

O s

yste

ms

Lack

of k

now

ledg

eabl

e pe

rson

nel

Centra

l cou

nterp

arty

risk

Lack of strategic dire

ction

Geographical segregation

of operational tasks

Lack of automated portfolio

simulation tools

COLLATERAL OPTIMISATION:

CHALLENGES AND OPPORTUNITIES 2015

COLLATERAL OPTIMISATION:

CHALLENGES AND OPPORTUNITIES 2015

ISSUES AFFECTING COLLATERAL MANAGEMENT

COLLATERALOPTIMISATION

BREAK GLASS HERE

OUTSOURCING VS. INSOURCING

BUYING VS. BUILDING

Outsourcing is expensive and requires trust in a third-party. Insourcing can mean greater operational control. However, insourcing does not automatically equal elimination of operational risk.

ENTERPRISE-LEVEL CHANGEVS. SILOED SOLUTIONSEnterprise-level change is expensive for large firms that want to take a more siloed and staggered approach. This carries the risk that the siloed implementations may not be consistent, leading to fractured enterprise change.

TACTICAL VS. STRATEGIC SOLUTIONSAlthough strategic change is the ideal solution for all organisations, quick and cheap Agile developments present a way to achieve change effectively without breaking the bank.

Buying a collateral management solution is easy with many vendor solutions on offer, but building is the only way to get a custom-ised, cutting-edge solution. Building requires a large budget and may not appeal to small firms looking for a quick solution.