Pledgee Representative model

Uncleared Margin Rules (UMR) phase 5

Buy-side - meet your Reg IM obligations more efficiently as pledgees and receive Reg IM collateral from your sellside counterparties within the proven infrastructure of Euroclear Bank.

Sell-side - leverage existing relationships with the buy-side and Euroclear Bank.

During the previous phases most sell-side firms opted to use Euroclear Bank triparty collateral management services in order to pledge Reg IM. In order to maintain the same high level of efficiency, they will want to continue to use triparty for the upcoming phases.

In order to fully benefit from the Euroclear Bank solutions, the buy-side will need to be active within the same ecosystem as the sell-side.


Legal options

The ISDA bilateral documentation supports the pledgee Representative Model in Euroclear Bank.

Both the pledgee and the pledgee Representative will need to sign the ‘Euroclear Security Agreement 2019’ (i.e. the Belgian Pledge Agreement).

Legal certainty

Euroclear has a number of legal opinions available for consultation. Please contact your relationship manager if you are interested in obtaining further information on this topic.


  • Quick and seamless access to the Euroclear Bank triparty environment for receiving Reg IM
  • No need to establish a new direct relationship with Euroclear Bank
  • Operational on-boarding is the key focal point to ensure UMR phase 5 implementation deadlines are met.
  • Pledgee Representative option is already included in the ISDA bilateral agreements and Euroclear Bank triparty agreements with supporting legal opinions


  • Leverage existing relationships between the custodians, the buy-side and Euroclear Bank
  • Continue to pledge securities using the same solution that was set up for all previous phases
  • The Pledgee Representative option is already included in the ISDA bilateral agreements and Euroclear Bank Triparty agreements with supporting legal opinions


Frequently asked questions

How does it work?

The pledgee appoints a third-party entity to act as an intermediary to manage the operational tasks required.

Who can act as a representative?

Any custodian, administrator, asset or investment manager, collateral managers or prime broker that is a Euroclear Bank client.

How is Reg IM collateral segregated?

The pledgor posts collateral to an account pledged in favour of the pledgee. This account is opened in the books of Euroclear Bank, acting in its own name but for the account of the pledgee Representative, which in turn acts in its own name but for the account of the specific pledgee.

What is Euroclear’s role in this model?

In its capacity as margin custodian, Euroclear Bank effects a pledge of the required collateral assets in its books.

And, in its role as a triparty collateral management service provider, Euroclear Bank collects the pre-agreed collateral obligations, automatically generates pledge instructions and monitors the value and eligibility of the pledged collateral.


Olivier de Schaetzen

Head of Product Solutions - Collateral Management

Gösta Feige

Director, Product Solutions - Collateral Management

Simon Mees

Product Solutions - Collateral Management