The Bank of New York Mellon this week rolled out a new netting service for derivatives dealers called Derivatives Collateral Net. The service uses a technology that, according to BNY Mellon, enables derivatives dealers to post only their net obligations against all other participants in the system, greatly reducing their gross collateral requirements and the risks and costs associated with derivative transactions.
"Derivatives Collateral Net represents the implementation of the International Swaps and Derivative Association's strategic vision for dramatically reducing the operational challenges associated with the margin process between counterparties," said Art Certosimo, executive vice president and head of Broker-Dealer Services at the Bank of New York Mellon. "We're making the process more efficient without affecting the fundamental bilateral nature of the credit relationship between the parties."
"As the global capital markets expand and evolve, our commitment to researching and developing innovative services will provide significant benefits to our clients and strengthen our competitive position around the world," said Kurt Woetzel, chief information officer and senior executive vice president at The Bank of New York Mellon. "Derivatives Collateral Net is the latest example of a new service developed in-house that improves our ability to service our clients."
The Bank of New York Mellon's tri-party collateral management services business services more than $1.8 trillion in tri-party balances worldwide.
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