Collateral management is built on relationship-defined contracts. There are many types of contracts with varying levels of complexity. As the demands on collateral have increased, the number of collateral contracts has expanded dramatically. The respective Market Associations are delivering and maintaining standard master agreements, for example the ICMA Global Master Repurchase Agreement (GMRA), the ISLA Global Master Securities Lending Agreement (GMSLA) or the ISDA Master Agreement and its Credit Support Annex (CSA). However, counterparties may still negotiate specific terms of the collateral contract bilaterally between themselves and need to agree on the collateral that is eligible through collateral schedules. With the massive increase in the number of collateral relationships, keeping collateral management contracts up to date is a constant challenge.
Changing the way we manage collateral contracts and schedules
As an FMI whose purpose is to best meet the needs of its clients, we took the decision to perform a complete review of our collateral contract and collateral schedule management processes as well as the associated workflows and the impact they have on client experience. The results of this review allowed us to identify some areas for improvement. These include streamlining the onboarding process to our collateral services, simplifying collateral legal agreements and speeding up the management of collateral schedules.
Four main pillars were identified
- Easing your admission as a new Euroclear Bank Participant.
- Easing your onboarding to our collateral services.
- Streamlining our collateral legal agreements.
- Speeding-up the implementation of your new or amended triparty collateral schedules.
As of September 2024, continuing through 2025 and beyond, we are launching a comprehensive suite of improvements to optimise process performance and workflows.
EasyWay is the platform at the heart of managing collateral schedules within our collateral management ecosystem. EasyWay is designed to make the management of your triparty collateral schedules fast and efficient. It allows you to retain full control while saving time and reducing your costs.
And although EasyWay is an intuitive digital tool, we appreciate that drafting triparty collateral schedules can be challenging. This is why, as of September 2024, on top of the launch of a series of EasyWay improvements, our new dedicated EasyWay drafting support team will be available to help guide you through the drafting process with a phone and email support service.
Irrespective of the way you decide to draft triparty collateral schedules (through EasyWay or by alternative means), we are improving our workflows and processes to speed-up the signature and the implementation of your triparty collateral schedules.
As of September, our signature workflow will become fully electronic and once you and your counterparty have signed the collateral schedule, we target 2 business days for the implementation of your schedule, so you are…ready to trade!
The legal framework supporting all collateral management activity provides clarity on the rules, rights and obligations of all parties involved. However, there are business- and product-specific rules that result in high levels of complexity.
We know that navigating this legal maze can be difficult. Which is why we are working on simplifying our legal documentation as well as reducing the number of different forms to be executed. Rest assured that these changes will have no impact on the robust and comprehensive framework that exists to support your business needs.
Longer-term our objective is to deliver a touchless end-to-end digital solution for collateral contract management by harnessing new technology and through innovation. Our future solution will include state-of-art collaborative platforms and will use new techniques like NLP to ease and automate the translation of your collateral requirements. Building on the success of our industry-leading Collateral Highway, we aim to deliver a best-in-class end-to-end client experience for collateral contract management.
Read more about this new initiative here > Collateral contract and collateral schedule management
