Northern Trust launches Margin Segregation service for OTC derivatives

Northern Trust has expanded its collateral management services for OTC derivatives trading. The new functionality will enable asset managers and institutional investors to outsource aspects of regulatory compliance to Northern Trust and optimise collateral selection. The Margin Segregation Service includes new capabilities that streamline complex processes for meeting uncleared margin rules, such as undertaking industry-standard electronic settlement messaging and providing advanced collateral reporting. Clients can use the service to pledge assets from their trading account and place them into segregated accounts for each broker, thereby retaining their investments with a single asset servicing provider. Additionally, Northern Trust has partnered with AcadiaSoft to provide an outsourced solution for collateral optimisation, calculating clients’ initial margin obligations, issuing margin demands to clients’ brokers, and determining if and when margin is to be transferred.