Euroclear and the Depository Trust & Clearing Corporation (DTCC) have secured State Street as a participant in a pilot programme to test their joint venture’s margin settlement messaging service.
The joint project, known as GlobalCollateral, will begin testing its new add-on after receiving authorisation from the Financial Conduct Authority to operate its margin transit utility (MTU) technology on 31 March.
The latest addition to the GlobalCollateral, a collateral processing platform first launched in 2014, is aimed to provide straight-through-processing for the settlement of margin obligations.
According to a Euroclear statement on the pilot programme, State Street, as a participant, hopes to further streamline its margin call processes, increase transparency through automated collateral settlement tracking, enhance client service, and improve custodian communications.
State Street will initially pilot the MTU functionality with select client portfolios to evaluate how the technology could be leveraged more broadly.
“We look forward to participating in this programme,” said Dick Taggart, executive vice president and head of State Street's investment manager services business.
“Industry collaboration and a community-based model for margin call management can decrease risk, drive standardisation and increase efficiency for our clients. As we enhance our collateral management services, we are focused on streamlining and scaling the margin call process, improving settlement certainty and increasing transparency.”
