BNY Mellon has been awarded a US patent for a process enabling the secure management of collateral between counterparties via its Margin DIRECT service.
The US Patent and Trademark Office granted the patent covering the Margin DIRECT product, which provides custody and liquidity services for posted margin collateral in counterparty transactions.
It offers “a strong element of risk mitigation between counterparty relationships” and helps “to facilitate marketplace liquidity through the use of a third party custodian”, according to BNY Mellon.
"One of the most important lessons learned from the financial crisis is that institutions require capabilities that help maximise liquidity and access to collateral," said Kurt Woetzel, CEO of BNY Mellon's global collateral services business. "With today's new regulatory requirements, there is an increased emphasis on collateral—clients need to know where to find it, how to protect it and how to unlock additional investment potential, while also working to reduce counterparty exposure."
The patent’s named inventor, Jonathan Spirgel, who is head of liquidity services and sales and relationship management in the global collateral services business at BNY Mellon, added: “The Margin DIRECT process helps our clients achieve their investment goals, while also helping to minimise counterparty exposure. This patent demonstrates both innovation and the powerful combination of BNY Mellon's expertise and its market-leading practices.”
