Baton Systems Adds LCH SA to CCP Network
Posted by Colin Lambert. Last updated: May 17, 2022
LCH SA has connected its CDS Clear service to Baton Systems’ Core-Collateral ecosystem, which seeks to transform post-trade processing using distributed ledger technology (DLT).
With LCH SA joining the fold, Baton says its clearing member clients will be able to directly access the expanded network of CCPs, which together hold a substantial share of collateral placed on deposit with the CCP community.
Core-Collateral seeks to overcome the operational burden of manually-intensive and time-consuming practices, by enabling the automation of end-to-end collateral workflows for cleared derivatives. The firm says it also improves decision making by providing intraday visibility of current margin obligations and collateral holdings, as well as the ability to instruct multiple cash and security movements via a single interface. This increases the financial and operational efficiency of collateral management processes, Baton says, as well as potentially improve net interest income and reduce associated risks.
Baton says it has orchestrated the settlement of more than 15 million transactions over the last 12 months, and that several of the world’s largest banks are now using the firm’s technology, which has facilitated the settlement of more than $7.1 trillion of cash and securities to date.
“We are focused on ensuring clearing members can automate and optimise as great a proportion of their collateral holdings as possible, because this has real implications on their bottom line,” explains Tucker Dona, head of business development and client success at Baton Systems. “In doing so, they can take greater control of their collateral under management and better support their clients, achieve higher net interest income and build a more scalable business with reduced dependency on manual processes. I’m delighted we have completed connecting to LCH SA as it increases access to the group of CCPs of greatest strategic importance to our clients.”
Frank Soussan, global head of CDS Clear at LCH SA, adds, “Working together [we are able] to help clearing members increase the speed in which collateral movements settle. We look forward to developing our collaboration with Baton further to improve post trade operational efficiency for our members and clients.”