A balancing act

The collateral challenge for capital markets firms

This report outlines the new requirements around the exchange and holding of collateral, and sets out the best practices and advanced techniques to respond effectively to the resulting collateral management challenge.

Collateral efficiency can have a significant effect on a firm’s revenue stream and cost structure. While some in the industry, principally the largest firms, are already adopting sophisticated approaches to collateral management, others are less advanced. The new regulatory requirements will add complexity to collateral management, but through effective use of advanced strategies and by employing appropriate operating models, firms can address these challenges.

Key Take-outs: Six key collateral management strategies:

Improving collateral management efficiency:

  • Matched book dealing
  • Internalisation
  • Market infrastructure 

Reducing collateral demand:

  • Portfolio margining
  • Collateral upgrades
  • Margin models

In addition to the collateral management strategies setout above, the report outlines the scope of the regulatory requirements and various approaches to collateral management operating models. 

How can Deloitte help? 

EMEA Centre for Regulatory Strategy – Africa Desk

The EMEA Centre for Regulatory Strategy - Africa Desk (EMEA CRS - Africa Desk) draws on financial services industry expertise from across Deloitte’s African network to provide our clients with a forward-looking view of the most important regulatory developments affecting them. The EMEA CRS - Africa Desk is an extension of the Europe Middle East and Africa (EMEA) CRS into the African Continent with a focus on the Africa financial services regulatory developments and draws on insights gained from the EMEA CRS where relevant.  

The two main objectives of the EMEA CRS - Africa Desk are:

i. To better understand the Financial Sector’s needs regarding transformation initiatives undertaken as a result of regulatory drivers

ii. Co-ordinate the Deloitte response in developing client-tailored solutions based on these regulatory drivers

Through the adoption of a strategic and forward-looking approach to the identification and analysis of emerging financial services regulation, the EMEA CRS - Africa Desk contributes to our knowledge management and empowers our staff to make an impact that matters during each client engagement. The EMEA CRS - Africa Desk coordinates and enables the engagement between our regulatory experts and those charged with accountability to manage an organisation’s response to changes in financial services regulation. 

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