UK - BNY Mellon and the Invensys pension fund have signed an agreement to develop what is described as a "ground-breaking" single collateral management platform.
Under the terms of the deal, BNY Mellon will first of all provide the £3.9bn (€4.33bn) pension fund with derivatives collateral management services on its exiting DM Edge platform, to handle administration, processing, reinvestment and valuations for the posting and receiving collateral for over-the-counter derivatives.
The bigger development, however, is a new platform is being developed which will see all of IPS' aggregate collateral needs linked to external asset managers and banks in future handled by a single system at BNY Mellon.
Robin Claessens, chief executive of the Invensys scheme - previously known as the BTR plc pension scheme - said the concept is considered critical to a pension scheme's overall risk management.
"This framework improves counterparty risk management, allows for a more efficient use of the scheme's collateral base, allows the scheme to benefit from economies of scale, and facilitates a more efficient use of certain securities' liquidity through potential repo/stock loan programmes," said Claessens.
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