Baton adds OCC to collateral management network

Rick Steves

“For the FCM community, this translates into ensuring money isn’t being left on the table. Our FCM clients are already using the Baton platform to move tens of billions of dollars of collateral every week.”

Baton Systems has announced connectivity to the Options Clearing Corporation (OCC) through the Baton Core-CollateralTM ecosystem, the firm announced.

The DLT-powered post-trade processing platform is expanding connectivity to allow clearing firms to automate collateral management across 11 major CCPs globally, together comprising more than 93% of margin, placed by U.S. registered FCMs.

With the rise of interest rates, FCMs are increasingly being pressured to maximize their non-cash collateral usage and Baton’s Core-Collateral solution enables Clearing Members to automate and optimize their collateral management processes by providing intraday visibility of current margin obligations and collateral holdings at the CCPs. This helps

Helping FCMs to improve both the financial and operational efficiency of their collateral movements for centrally cleared derivatives, they are able to minimise what can otherwise prove to be a massive operational burden, with significant associated risks.

FCM clients can automate and optimize collateral under management

Tucker Dona, Head of Business Development and Client Success at Baton Systems, said: “The need to reduce costs associated with funding and liquidity is becoming increasingly important. For the FCM community, this translates into ensuring money isn’t being left on the table. Our FCM clients are already using the Baton platform to move tens of billions of dollars of collateral every week. With an additional CCP they now have the opportunity to automate and optimise an even greater proportion of their collateral under management. We are excited about the opportunities and transformative benefits this presents to our clients.”

Baton has facilitated the settlement of more than $7.1 trillion of cash and securities to date as it addresses the most critical risk, capital and liquidity issues impacting post-trade today.

Before the OCC, the latest CCP to connect to Baton’s Core-Collateral ecosystem was LCH SA which allowed clearing Members using the solution to automate and optimize collateral holdings and expedite the movement of cash and securities to LCH SA alongside holdings with CCPs including LCH Ltd, CME Clearing, Eurex, ICE Clear Europe, ICE Clear US, ICE Clear Credit, and SGX.

The technology allows firms to automate end-to-end collateral workflows for cleared derivatives, to improve decision making by providing intraday visibility of current margin obligations and collateral holdings, and the ability to instruct multiple cash and security movements via a single interface.

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