Triparty Collateral Management

Triparty Collateral Management

Real-Time Exposure Coverage and Collateral Substitution

Comprehensive Triparty Collateral Management Solution

Collateral management is supposed to be a routine middle office task. Since the financial crisis, however, it has come to be viewed as a key tool to mitigate counterparty, credit and operational risk. Though collateralization can be a challenge to manage.

The Triparty Collateral Management (TCM) service of SIX is an attractive option for firms that prefer to stick to their core competencies. That said, new regulations require more transparency and reporting on collateral management activities. To enable transparency, standardization and automation are critical. And as the day-to-day management of collateralization activities can be quite demanding, many firms – banks, insurance companies, pension funds – choose to take advantage of the triparty collateral management service. 

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The SIX Repo-Infodesk is pleased to be your single point of contact for any questions you may have.

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Delegate Your Day-To-Day Operational Responsibilities to SIX

By choosing this route, the two parties to a transaction can effectively delegate their day-to-day operational responsibilities around collateralization to SIX – this is where SIX’ Triparty Collateral Management solutions come into play. SIX performs tasks such as the selection and automatic execution of collateral transfers and ongoing validation that exposures are being appropriately collateralized through daily mark-to-market checks on the collateral throughout the lifecycle of the transaction.

Dedicated TCM Solutions for:

  • Clearing Brokers
  • Regulated Initial Margin
  • Structured Products
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TCM Factsheet

SIX takes care of the entire collateral management lifecycle, including operational responsibilities, to ensure that all exposures are fully collateralized at all times. 
 

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How Triparty Collateral Management Works

Exposure Coverage - Irrelevant of Its Origin

Collateral Management process with the SIX Collateral Cockpit

SIX can collateralize various types of underlying principal agreements which the parties may have entered - these underlying transactions are stand-alone transactions which are carried out by the parties independently of SIX. For example, the service can be used to cover an exposure resulting from a bilateral or OTC trade or where exposures originate out of cash loans or securities lending transactions, regardless of where the transaction was concluded. SIX’ TCM standard solution covers them in a highly efficient manner according to the individual needs of collateral provider and collateral taker.

Our range of services is complemented with dedicated TCM solutions covering your collateral needs in connection with Clearing Brokers, Structured Products and Regulatory Initial Margin.

Key Benefits

Delegation of Exposure Coverage

SIX assumes responsibility for administering and collateralizing exposures.

Collateral Substitution

Excess collateral is stored in a pool account and drawn upon in case of a shortfall.

Collateral Cockpit: Mobilizes Your Inventory

Real-time view across all your securities finance activities, including forecasting.

Lifecycle of a TCM Transaction: From Matching to Settlement

Cycle of Triparty Collateral Management through a Triparty Agent

The parties to the triparty transaction agree the terms and conditions of the transaction outside the triparty environment, both sides mandate and instruct the TPA to process, collateralise and service their transaction within the triparty’s system during the transaction lifecycle.

Default Handling

In the event of a default triggered by official measures taken by the relevant Swiss or foreign supervisory authority or at the discretion of SIX, the default process is initiated without delay. This process includes the timely dissemination of information to relevant stakeholders, immediate risk mitigation, assessment of the exposure and collateral situation, and liquidation or orderly unwinding of positions.

TCM Solutions

Any Questions? We Are Happy to Help.

  • Repo Infodesk

    The SIX Repo-Infodesk is pleased to be your single point of contact for any questions you may have. During the trading days we offer support from 07:15 to 18:15 CET.

    • +41 58 399 2190
    • SIX
      Securities Finance
      Pfingstweidstrasse 110
      8005 Zurich