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BNY Mellon and Baton Systems Collaborate to Deliver Collateral Optimisation Solution

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BNY Mellon and Baton Systems, a post-trade processing provider that uses distributed ledger technology (DLT), have announced a collaboration to integrate Baton’s Core-Collateral solution into BNY Mellon’s collateral management platform. This will enable mutual clients to optimise portfolio allocations and accelerate the mobilisation of cash and securities collateral across both uncleared and cleared margin obligations globally.

Baton’s Core-Collateral solution enables Clearing Members to automate and optimise their collateral management processes by providing intraday visibility of current margin obligations and collateral holdings at chosen Central Clearing Counterparties (CCPs). Earlier this year, Baton expanded the network to include connectivity to the Options Clearing Corporation (OCC).

By bringing together Baton’s established CCP network and BNY Mellon’s Enterprise Continuous Portfolio Optimisation (ECPO) service, the new jointly distributed offering will support clients in reducing funding costs and improving profitability, while increasing the velocity of collateral to better manage risk.

“We’re excited about the tremendous potential this joint service presents to our clients, empowering them to optimise, mobilise and connect all of their collateral needs across different products and venues,” commented Victor O’Laughlen, Digital Business Leader at BNY Mellon. “Working with Baton, we will be delivering a solution at the leading edge of innovation.”

BNY Mellon’s collateral management system will also orchestrate the collateral allocation workflow and reporting across triparty repo, securities lending, and cleared/uncleared derivatives margining.

“We at Baton Systems are excited to be launching our collaboration with BNY Mellon,” said Jerome Kemp, President at Baton Systems. “The union of Baton’s extensive CCP connectivity with the ground-breaking functionality of BNY Mellon’s ECPO service forms a powerful offering to cleared derivatives market participants. The rapid mobilisation of assets and the enhanced optimisation of margin collateralisation is a game changer for the market.”

The integration is contingent upon the execution of a definitive collaboration agreement, which is expected to be completed in the near term.

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