Northern Trust (Nasdaq: NTRS) is enhancing its collateral management and liquidity solutions in order to help clients meet the requirements of implementing various regulations, such as the Dodd-Frank Act and European Market Infrastructure Regulation (EMIR).
The intersection of these regulations will impact institutional investors in a number of ways, particularly increasing the need for liquidity and, over the longer term, creating a collateral squeeze, said Fiona Horsewill, head of product and strategy for Europe, Middle East and Africa at Northern Trust.
Under the Dodd-Frank and EMIR guidelines it is anticipated market participants will require greater amounts of eligible collateral and will see increased demand for liquidity. However, aspects of the Basel III regulation, and others, may limit the levels of collateral and liquidity available in the market, thereby creating challenges for investors.
Northern Trusts solution will enable clients to hold their assets within a transparent account structure, even when being used for collateral for clearing derivative positions. Through the enhancements, clients will be able to:
By expanding our liquidity access solutions, we can help support our clients short-term liquidity needs so that they are not required to liquidate assets unnecessarily in order to meet the variation margin demands, said Horsewill. We will continue to work closely with our clients and the wider market to create solutions that will ensure access to eligible collateral through a variety of sources to meet regulatory driven collateral requirements.
How and why will Dodd-Frank and EMIR affect market participants? Watch our 2-min media video: http://bcove.me/7e2nl5ur
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 states, and Washington D.C., and 18 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2013, Northern Trust had assets under custody of US$5.6 trillion, and assets under investment management of US$884.5 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures