State Street Unveils Counterparty Risk Tool

Buy side powerhouse State Street announced the launch of its new Collateral Tracking service that aims to help asset managers assess and manage counterparty risk.

The new service delivers receive up-to-date reporting on the location and status of collateral movements regardless of where the assets are held, the company claims in a press release.

The Collateral Tracking service expands the traditional core custody function of acting on direction from the asset manager to move collateral, including cash or securities, in and out of an account, according to company claims. The enhanced service automates a previously manual process, which required asset owners to contact each broker or investment manager individually to determine the outstanding collateral at any point in time. Clients can send their collateral instructions to State Street's proprietary collateral tracking hub, which automatically initiates the process of tracking the status and location of all outstanding collateral. Additionally, the service's fully customizable reporting allows clients to schedule reports to run systematically or upon request, using any combination of date range, advisor, client, counterparty, fund, or product type.

"At State Street, we are constantly developing new products to help monitor and manage risk for our clients," says Patrick Centanni, executive vice president and head of global product management at State Street. "The Collateral Tracking service provides clients with settlement status updates and event monitoring information to increase transparency and mitigate counterparty risk exposure."

"State Street's new collateral tracking capabilities are a core component of our derivatives strategy, which is designed to address the unique challenges our clients face in the derivatives market today," says Jeff Conway, executive vice president and head of investment manager operations Servicing at State Street. "State Street's derivative servicing suite now includes end-to-end OTC and exchange traded derivatives processing, collateral management, and independent valuations."

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio