BlackRock, BNY Mellon and State Street Accept Markit’s ETF Collateral Lists
Markit (Nasdaq: MRKT), a leading global provider of financial information services, today announced that BlackRock, BNY Mellon and State Street have accepted Markit’s ETF collateral lists for inclusion in their collateral management schedules.
Markit’s ETF collateral lists support securities lending professionals in identifying which equity and fixed income ETFs to accept or post as collateral. The lists are derived using standardised filtering criteria, including geographic exposure, holding type and assets under management.
Tim McLeod, director of securities lending and finance at BlackRock, said: “The classification of ETFs into easily-assessable filters represents an important step in standardising the way the industry looks at ETFs as collateral instruments. Removing the need to assess the viability of ETFs individually, and instead analysing a broader set of common attributes, is a much more dynamic and robust model for lenders, borrowers and triparty agents alike. We are very supportive of the efforts Markit have made to date and feel this user-friendly solution will benefit market participants and investors."
Brian Staunton, managing director of collateral services at BNY Mellon Markets Group, said: “The adoption of Markit’s ETF lists enables our clients to utilize this asset class as collateral in a more efficient way.”
Maurice Leo, senior managing director, securities finance at State Street, said: “We believe Markit’s ETF collateral lists should facilitate greater adoption of ETFs as collateral by creating a recognised universe of ETFs that streamline trade execution and the collateral management processes for all parties. These equity and fixed income lists will extend the universe of ETFs that State Street has historically accepted under its risk management policy.”
Pierre Khemdoudi, managing director of securities finance at Markit, said: “A lack of standardised criteria, market opacity and the onerous management process for risk departments mean that many market participants have historically not accepted ETFs as collateral. Our lists aim to bring transparency and simplicity to the market, facilitating access to ETFs for use as collateral.”
Markit applies a seven-tier filter to more than 6,000 global exchange traded products (ETPs) to create lists of equity and fixed income funds that meet generally acceptable criteria for use as collateral. Market participants can easily reference these lists in collateral schedules, streamlining assessments of fund characteristics and simplifying reviews of collateral eligibility by risk departments.
BlackRock is a global leader in investment management, risk management and advisory services for institutional and retail clients. At September 30, 2015, BlackRock’s AUM was $4.506 trillion. BlackRock helps clients around the world meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. As of September 30, 2015, the firm had approximately 12,900 employees in more than 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company’s website at www.blackrock.com.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of September 30, 2015, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors, including
investment servicing, investment management and investment research and
trading. With $27.3 trillion in assets under custody and administration
and $2.2 trillion* in assets under management as of September 30, 2015,
State Street operates in more than 100 geographic markets worldwide,
including the US, Canada, Europe, the Middle East and Asia. For more
information, visit State Street’s website at www.statestreet.com.
* Assets under management include approximately $25 billion as of September 30, 2015, for which State Street Global Markets, LLC, an affiliate of SSGA, serves as the distribution agent.