JP Morgan’s collateral services team is working with post-trade fintech Baton Systems to enable triparty clients to automate the optimisation of collateral to meet margin calls at a range of clearing houses.
Having gone live with the first central counterparty (CCP) in November, the collaboration will enable the roll out of the solution across Baton’s network, which currently includes 13 clearing houses across EMEA, North America and Asia.
Baton Systems added that the network also comprises more than 94% of cleared margin posted by US registered FCMs [futures commission merchants].
As a result of the collaboration, Baton’s Core-Collateral solution has been integrated into JP Morgan’s CCP Margin Exchange (CCPMx).
Graham Gooden, EMEA head of triparty collateral management at JP Morgan commented “We’re delighted to help clients find increased efficiencies through improved collateral mobilisation in the clearing process.”
JP Morgan’s collateral and securities finance team has struck a number of partnerships in recent years, collaborating with BlackRock on its collateral mobility network, investing into mobility fintech HQLAx, and teaming up with Sharegain to bolster its agency lending offering earlier this year.
Its latest partner, Baton Systems, is looking to help market participants in their selection of optimal composition to meet margin obligations, something particularly important in a high interest rate environment.
“Reimagining this process, tri-party clients can now easily aggregate all available collateral across their various sources into a single longbox, automatically select the most cost-effective securities and rapidly mobilise all assets,” said Baton Systems in a statement. “In doing so, they are improving the efficiency of the collateral management process, allowing more effective funding decisions to be made and reducing operational risk.”
The fintech said it plans to extend CCP connectivity globally with further CCPs expected to be added in the new year.