Our clients trust us to mobilise more than €1.8 trillion of collateral daily. Euroclear is committed to offering an industry leading end-to-end client experience in managing contracts and collateral schedules in the collateral space
Collateral Contract and collateral schedule management
Euroclear’s Collateral Highway lets you mobilise your collateral across borders, providers and time zones using our neutral and global open architecture infrastructure for collateral management. From its initial vision, the Collateral Highway has helped power the dramatic expansion of collateral markets, coping with an expanding range of products and supporting a multitude of legal and operational frameworks. With new regulations, high market volatility and a constant focus on liquidity, the Collateral Highway will continue to build on its success and remain the best-in-class solution for all your collateral needs.
In that context, we are committed to providing an industry leading end-to-end client contract management experience through a program of improvements to be deployed throughout 2024, 2025 and beyond.
With decades of experience as a triparty agent, Euroclear Bank offers a broad spectrum of products and services, managing collateral needs across a large range of legal frameworks from plain vanilla to more complex products. As part of our commitment to continuous improvement of the services we offer, we conducted an in-depth analysis on our end-to-end contract management process flows and the resulting client experience and identified ways we could improve both.
Four main pillars were identified.
- Easing your admission as a new Euroclear Bank Participant.
- Easing your onboarding to our collateral services.
- Streamlining of our legal agreements.
- Speeding-up the implementation of your new and amended triparty collateral schedules.
We have a comprehensive program in place to deliver on each of these pillars, throughout 2024, 2025 and beyond, leading to significant improvements in your client experience. The initial focus will be on speeding-up the implementation of your triparty collateral schedules (September 2024), considering both the massive volume of schedules under management and the increasing need to quickly implement or amend schedules such as in the case of market events.
Once you have executed the relevant master legal agreement, you then negotiate, with your counterparties, one or several triparty collateral schedules. You will find our triparty environment has a complete universe of collateral criteria allowing you to quickly and easily meet your firm’s collateral policies and financing needs. It is essential to set up schedules accurately and maintain control of their structure so that, at any time, you can see what triparty collateral schedules you have in place - active or under negotiation - and subsequently make any changes needed on a timely basis. Implementation of new and amended triparty schedules is a key step in driving your time-to-trade.
Euroclear is offering two communication channels, and associated workflows, to implement or amend your triparty collateral schedules.
With EasyWay we deliver one single digital place to communicate and manage your triparty collateral schedules on an end-to-end basis. You draft your triparty collateral schedules, you share them to your counterparties, you sign them electronically and then you release them for implementation within our ecosystem.
EasyWay is the most efficient way to implement all your triparty collateral schedules.
You send us your request via email. This request can be a brand new triparty collateral schedule to draft and implement or a small amendment to an existing schedule. Our Contract Management operational teams will then manage the next steps of the lifecycle of your request, up to confirmation of its successful implementation.
We are delivering a series of enhancements to EasyWay, to make it a more powerful and simple to use online solution, designed to make the management of your triparty collateral schedules fast and efficient. You retain full control, you save time and you reduce your costs.
Although EasyWay is an intuitive digital tool, we appreciate the drafting triparty collateral schedules can be challenging. As of September 2024 our team of Easyway Drafting experts in Collateral Operations will be available to guide/help you through the drafting process. Everything you need for help with the drafting or amending of Collateral Schedules will be just a phone call away. Don’t hesitate to contact us to set-up a dedicated EasyWay drafting training session to get you started or to request a refresher session.
Additionally, when you feel your triparty collateral schedule is stable and ready to be shared with counterparties, you will be able to request a sanity/validation check to be performed on your schedules by Euroclear prior to entering the electronic signing process.
Our EasyWay Dashboard will give you simple and efficient digital access to all your triparty collateral schedules and will give you full control when drafting and amending contracts.
Last but not least, EasyWay delivers now a full triparty products coverage and we have added many new validation rules to support and guide you on-line.
Once your draft is completed, triparty collateral schedules can now benefit from an improved signing workflow, including bulk signing, i.e. the signing of multiple collateral schedules in one click. Use the EasyWay dashboard to easily retrieve all Collateral Schedules ready for signature and from there select all to sign them all at once.
EasyWay workflow is a 4-step process.
- You start drafting your new or amended triparty collateral schedule. If you have questions, you can contact our EasyWay drafting support team and in any case, you will benefit from on-line checks of the coherency and consistency of your draft. Before entering the electronic signature workflow, you can request Euroclear to perform a sanity/validation check on your schedules.
- You and your counterparties can sign the schedules through a fully electronic signature workflow, with various signing options available, including bulk signing of multiple collateral schedules at the same time.
- Once signed by both parties, Euroclear Bank will implement the triparty collateral schedule, as long as your legal documentation is in place and meets the necessary requirements.
- Once implemented, Euroclear Bank will confirm that the collateral schedule is live and available for use.
Once Step 2 is completed, the target for implementation is two business days.
We also continue to support the alternative to our EasyWay digital solution – an email-based workflow
This alternative solution cannot offer the same turnaround time as EasyWay, however, we have adapted our processes to also make this workflow faster, more transparent and more efficient.
Firstly, as from September 2024, all your draft requests will be directed to our dedicated team of collateral contract experts who will perform an initial completeness and coherency check of your request and, where required, revert to you with questions to understand, fine tune your request and make it ready for processing.
You can use free format in your email, or alternatively, a pre-formatted template, allowing to structure your request and ensure all relevant information is provided. Sending us a structured request will accelerate the drafting phase. Going forward, we will also introduce a new web-based channel for you to communicate your requests to us.
Once a request has been completed and validated, our operations team will input it in EasyWay on your behalf.
The email-based approach will require you to sign up to our new electronic email signature workflow. Once our operations team have completed the drafting of a collateral schedule, an electronic copy will be automatically shared with you via email for signature. Both EasyWay and email digital signature flows benefit from an automatic collection and matching of digitally signed Collateral Schedules with full cross-channel integration. This combined with enhanced status reporting will greatly increase the speed of implementation as well as create transparency on pending items.
For requests received by email, the contract implementation follows a 7-step process
We have streamlined our triparty collateral schedules drafting and implementation workflows by leveraging the EasyWay template functionality.
When drafting a new collateral schedule, there will be three options to choose from.
- When you need to implement a collateral schedule for one specific account, you create a new (bespoke) collateral schedule and link it to that account.
- When you want to create a new collateral schedule that may be linked to multiple accounts either now or in the future, you draft a template that can be (re)-used for multiple (future) accounts.
- You link an existing collateral schedule template to an account.
Important: This new approach will replace the use of signed, fixed templates, known as 'Fast-Track Annexes', by a more flexible template approach. The main difference is that once a template is finalised it will be added to a library of templates. Under the new approach, signatures will only be required once at the end of the process when the collateral schedule is linked to the actual account for implementation, speeding up the process.
The associated MT 599/fax Fast Track Activation messages will be discontinued as well. The cumbersome and manual process of drafting and collecting these Activation Messages created delays and inefficiencies and prevented us from going fully digital and from increasing STP.
The new Template approach will allow for greater autonomy and flexibility in creating your Collateral Schedules, will remove the inefficient dual signature process (FT Annex & FT Activation) and will limit the touch points with Euroclear Bank Operations to a single moment in time (after signature). This results in an overall smoother and faster Collateral Schedules management flow.
Transition Actions
- Transform the way you work with us today and onboard EasyWay contract management. Reach out to you Collateral Account Manager or visit our webpage for more info on how to get started with EasyWay: https://my.euroclear.com/eb/en/reference/connectivity-basics/easyway.html
- Get ready to take advantage of the new digital email signature launching in September 2024 - Sign-up now by completing the RG 603: https://my.euroclear.com/dam/EB/Forms/RG-603-Triparty-reporting.pdf
- As of September 2024, you will be able to benefit from our new dedicated email address to send all your Collateral Schedule drafting request to: triparty.contracts@euroclear.com.
While we are making significant improvements to our Collateral Schedules workflow, we recognize the need to swiftly implement collateral exclusion requests, especially in response to sanctions, internal risk policy adjustment, market events or similar circumstances.
To cater to these bilateral Collateral Schedule amendment requests we will introduce a new same-day email exclusion workflow leveraging our newly developed digital workflow.
The legal framework of collateral management provides the foundation for the rules, rights and obligations of all parties involved and is often complex, being business and products specific.
With many different frameworks, navigating the maze can be difficult. We are working on simplifying our legal documentation, and especially reducing the number of agreements to the minimum required, whist maintaining a robust and complete framework tailored to your business needs.
We are committed to you. We are committed to improving our overall collateral contract management support to make your life easier. A robust, secure environment, scalable for your business needs, with on-demand transparent reporting and full control of all your contract management at all times.
All the enhancements we have presented to you are using our current technology stack. Recognizing the increasingly critical role of contract management in your day-to-day collateral business, we are working on re-architecting our contract management infrastructure. This is a longer-term undertaking and our objective is to deliver a touchless end-to-end digital solution for collateral contract management. This solution will include state-of-the-art collaborative platforms and will use new techniques like NLP to ease and automate the translation of your collateral requirements.
In any case, you can be confident that our solutions and developments will help you prepare your business for the future of our industry, responding faster to the ever-increasing pace of life.
As a Euroclear Bank client, you can take full advantage of our Collateral Highway products and services to meet your business needs. If you are not an existing Euroclear Bank client yet, our standard admission procedure allows you to gain access to our full, comprehensive range of services. If you only require access to a more limited ranges of services, we also offer a quicker, simpler admission process – providing access only to the specific services you require.
Our application process and due diligence is comprehensive, taking into account potential risks to financial stability and continued operation of the financial markets and meeting our KYC and ALM requirements. That will not change, but we are conducting a full review of our application process to make significant improvements, which will shorten the time taken to join the Collateral Highway community.
