Northern Trust and ABN AMRO Clearing have created a solution to help institutional investors meet their collateral transparency requirements.
Under the terms of the collaboration ABN AMRO Clearing will provide derivatives clearing services which, combined with Northern Trust’s custody and collateral management services, will help clients respond to the new regulatory requirements and reduce the burden of the transition to a cleared derivative environment.
The Northern Trust and ABN AMRO Clearing solution provides clients with a set of account structures for cleared derivatives designed to increase safety and transparency on collateral flows throughout the central clearing process.
“Dutch pension funds and insurance companies with derivative exposure are highly sophisticated and will face a number of unique regulatory challenges,” says Justin Chapman, global head of industry management at Northern Trust. “Working with ABN AMRO Clearing we can reduce the risk associated with counterparty and settlements and enhance the safety of our clients’ assets within transparent account structures.”
Under Dodd-Frank and the European Market Infrastructure Regulation (EMIR), market participants will need greater amounts of eligible collateral and will face increased demand for liquidity. This creates challenges for institutional investors.
“In the current landscape, it is very important for institutional investors to rely on experts in their respective domain,” says Gildas Le Treut, global director of prime clearing at ABN AMRO Clearing. “We are delighted to collaborate with Northern Trust to provide solutions that will allow clients to face regulatory challenges more efficiently.”
