RBC I&TS launches collateral liquidity service
RBC Investor and Treasury Services has launched a service which monitors and provides stress tests for collateral liquidity.
The Collateral Risk Report solution will assist clients with regulatory reporting requirements under the new regulations mandated by the European Securities Markets Authority (Esma).
“New regulations are driving clients to reconsider the way they manage their collateral and associated reporting processes. Our Collateral Risk Report helps users to meet these evolving requirements while optimising operational efficiency, mitigating risks and reducing costs,” said Joanna Meager, global head of client operations and head of investor and treasury services in the UK.
The service monitors and measures the eligibility and diversification of collateral received in relation to over-the-counter (OTC) transactions and efficient portfolio management techniques.
It also provides liquidity stress testing whenever a fund’s aggregated collateral exceeds 30% of the fund’s net asset value, in accordance with Esma guidelines.
The Esma Guidelines outline criteria that Ucits and Ucits exchange-traded funds must meet when entering into over-the-counter (OTC) derivatives transactions and efficient portfolio management (EPM) techniques.
The requirements aim to reinforce investor protection and transparency, mitigate counterparty risk and harmonise regulatory practices across Europe.
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