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Northern Trust Enhances Collateral Management Services to help Clients Optimize Performance and Meet Margin Obligations

Technology-led Margin Segregation Capabilities and Collaboration with AcadiaSoft to Drive Efficiency for Asset Managers and Institutional Investors

CHICAGO and LONDON, 17 December 2019 – Northern Trust (Nasdaq: NTRS) is expanding its collateral management services for over-the-counter (OTC) derivatives trading. The new functionality will enable asset managers and institutional investors to outsource key aspects of regulatory compliance to Northern Trust and optimize collateral selection – driving efficiencies in how they meet margin obligations. 

Northern Trust’s Margin Segregation Service will include 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 take advantage of 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 for optimal efficiency, consolidated record-keeping and oversight.

Additionally, Northern Trust has partnered with risk and collateral management services expert AcadiaSoft to provide an outsourced solution for collateral optimization calculating clients’ initial margin obligations, issuing margin demands to clients’ brokers, and determining if and when margin is to be transferred.

With this service, clients will have the ability to seamlessly optimize collateral selection, using algorithmic technology to identify their best assets available to meet regulatory eligibility requirements. It will allow only optimal assets to be deployed to meet margin obligations – helping optimize investment performance.  

Judson Baker, derivatives product manager at Northern Trust, said: “Our clients’ use of derivatives often falls within the threshold of heightened global derivatives regulation, requiring resource-intensive tasks to support compliance. By outsourcing these complex and onerous functions, they can draw on our expertise and advanced technology – negating the need for costly investment in their systems. They can also minimize the value of their assets locked up as collateral by using our optimization solution.” 

Collectively, these capabilities may enable Northern Trust’s clients to meet their obligations under the European Market Infrastructure Regulation (EMIR), the United States’ Dodd-Frank Wall Street Reform and Consumer Protection Act, and equivalent global regulations.

These advanced capabilities will be part of Northern Trust’s comprehensive range of collateral, derivatives and liquidity management solutions. Clients can access these services globally, either on a component basis – to complement their current in-house practices – or as part of a broader suite of collateral management solutions.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 20 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2019, Northern Trust had assets under custody/administration of US $11.6 trillion, and assets under management of US $1.2 trillion. For 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit 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 https://www.northerntrust.com/terms-and-conditions.

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