The most immediate impact will be on the sell side. However, there will also be far-reaching consequences for the buy side and other derivatives end users.
The new rules will create a number of headaches for collateral managers, with the potential to increase workload and overwhelm operations teams.
The changes will result in a need to:
- Source more collateral
- Mobilize collateral more efficiently
- Optimize the collateral that is pledged to manage costs
- Deal operationally with the increase in margin calls and collateral movements
- Appropriately segregate collateral
- Manage the quality and concentration risk of the collateral portfolio more closely
- Ensure compliance with a more complex regulatory checklist