Going electronic

Collateral management functions currently exchange margin call notices and confirmation of interest payment by email, but the need for automation is becoming more urgent. The industry is looking to define the sequence of messages that would need to be exchanged to allow the electronic communication of margin calls, but how long will it take for the vendors to develop a solution? By Clive Davidson

As part of its effort to improve efficiency in collateral management processes, the derivatives industry has identified the need to automate the exchange of messages relating to margin calls, confirmations of interest settlements and requests for collateral substitutions. This will entail replacing current email, telephone and fax communications with electronic messaging.

While there is general agreement this will improve the efficiency, reliability and security of communication, it raises a