The Japanese Securities Clearing Corporation (JSCC) has joined Baton Systems’ Baton Core-Collateral network.
Baton Core-Collateral allows users to receive normalised data directly from CCPs, rather than having to access them through clearing members’ files. This improves efficiency and provides access to real-time balances, Baton said, allowing clearing members to check eligibility, instruct, and move both cash and non-cash collateral to the CCP. In turn, this improves decision-making practices and net interest income while reducing risk, it added.
The bi-directional integration with JSCC expands Baton Core-Collateral’s APAC network, with SGX already a part of the ecosystem. Globally, 13 CCPs are covered, covering 95% of global initial margin, Baton stated. The platform allows clients to automate and expedite the movement of cash and securities via a single interface, consolidating and normalising real-time updates around required margin, collateral sources and eligibility profiles.
Collateral eligibility data from JSCC is being integrated into Baton’s eligibility API, which offers automated, real-time determination of which assets can be used as collateral. This streamlines the collateral management process, Baton said, and ensures compliance with CCP requirements.
On the announcement, Tucker Dona, head of business development and client success at Baton Systems, commented: “The addition of JSCC to the Baton Core-Collateral ecosystem is a big step to increasing access to the most strategically important CCPs for our clients.
“As a result, we are able to assist more FCMs and clearing members globally to automate and optimise a significant proportion of their collateral holdings. This is incredibly important in helping these firms reduce dependency on manual processes and optimise collateral management at a time when market volatility and a higher interest rate environment place growing pressure on the margin posting process.”
Yasuhiko Tamura, executive officer of OTC derivatives clearing services at JSCC, added: “We are delighted to work with Baton Systems on this collaboration. This will provide our clearing members with greater post-trade operational efficiency, through Baton’s ability to provide real-time intraday balances and an enhanced methodology of moving collateral.”
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