HSBC Introduces OTC Clearing Collateral Service

HSBC Securities Services, part of HSBC's Global Banking and Markets business, today announced the launch of its Over-the-Counter (OTC) Clearing Collateral Service. The purpose of the new service is to support clients in meeting the requirements of the G20 swap clearing reforms which are now extending into Europe and Asia and place a greater demand on buy-side firms to manage and mobilise their collateral more effectively.

Clients can now keep pace with global regulatory change.

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In Europe, the European Market Infrastructure Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term imposes new obligations on investment management firms to clear OTC derivatives trades through a central counter-party. These are due to come into effect in December 2016. Similar obligations also apply, or will shortly be implemented by local regulators in Asia.

Commenting on the new capability, Craig Cowe, Head of Collateral Management Product, Securities Services, HSBC, said: "Incoming regulations to centrally clear OTC derivatives mean that it's crucial for investment managers to know where their assets are and what they can be used for. We've put in place collateral processing hubs in Europe and Asia and have invested significantly in our capability to ensure our clients can keep pace with global regulatory change."

HSBC's latest offering has responded to the regulatory changes by providing clients with an independent and highly automated collateral management service. This includes calculation and verification of margins and interest as well as automated margin Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term.

Collateral movements are processed on a straight-through basis using market standard SWIFT links with custodians. Reporting is provided online via HSBC's client portal and includes underlying trade and collateral position information.

John Van Verre, Global Head of Custody and Treasury at HSBC, added: "In the past, collateral management has been viewed by many institutional investors as a back office activity. These new regulatory requirements mean that the process is becoming more firmly integrated with the front office, which requires much more proactive management of positions than historically was the case."