Pershing has rolled out two applications that automate the process of moving collateral between the custodian and Pershing Prime Services, the company announced Monday.
Pershing’s new PrimeConnect tool provides transparency and control of collateral selection and movements to hedge fund managers that use BNY Mellon to hold unencumbered assets, according to a company statement. Pershing is a unit of the Bank of New York Mellon Corp.
PrimeConnect40 offers transparency and online collateral movement to ’40 Act fund managers using the tri-party structure to support alternative strategies.
The new service is available exclusively through Pershing’s NetX360 technology platform for fund managers and investment professionals.
Pershing said the two applications were intended to help generate operational efficiencies and cost savings and to address managers’ concerns about counterparty risk and collateral management.
“Increasing concern over counterparty risk, coupled with the traditionally cumbersome and time-consuming collateral management process, has led many fund managers to be cautious when pledging collateral to their counterparties,” Gerry Tamburro, managing director at Pershing, said in the statement.
“PrimeConnect and PrimeConnect40 not only eliminate the phone calls, faxes and e-mails, but they provide a clear window into the movement and management of collateral.”
Pershing noted that collateral management, long considered a standard middle-office function, has become a key risk management function because of current financial volatility. Automating this process through online and real-time applications bolsters its fund manager clients’ ability to monitor and manage risk.