BNY Mellon Transforms in Securities Finance, Collateral and Liquidity

With the next phase of adherence coming up in September, there are many firms looking for comprehensive margin management, not just segregated accounts, according to Laide Majiyagbe, a newly appointed Head of Financing and Liquidity at BNY Mellon.

“Ahead of the non-cleared margin rules implementation, we set out to be the leading resource for knowledge and—keeping with the connected theme—provide a full solution set across the lifecycle of regulatory adherence. This strategy has been highly successful for us, cementing our position as the market solution for firms looking to outsource their compliance with these rules,” she said.

“In addition, we are expanding the benefits of our non-cleared service offering into the cleared derivatives and trade analytics space, where clients are looking to simplify their operational processes across multiple products,” she told Traders Magazine.

There are two segregation structures in play today: Tri-Party and Third-Party. According to Majiyagbe, Tri-Party provides a high degree of automation, while Third-Party allows to take a more “hands-on” approach.

Majiyagbe said that Third-Party accounts are traditional custody structures, which require the collateral provider to select and instruct the movement of the collateral to be used. 

“This is generally popular with clients that have fewer counterparties and a few forms of collateral that will be segregated,” she said.

“Tri-Party accounts help maximize efficiency and flexibility for collateral providers. The Tri-Party system outsources the mix of margin segregation collateral and its popular with clients that have a large variety of collateral to provide or multiple funds with complex allocation requirements. The Tri-Party option uses an algorithm to determine the optimal mix of collateral with many counterparties within the regulatory requirements,” she added.

Majiyagbe is confident that her experience across liquidity management, securities finance and collateral management can help to drive the upcoming changes within BNY Mellon’s Securities Finance, Liquidity Services and Collateral Segregation businesses.

“We are fortunate that we are market leaders in each of these businesses individually. Our challenge now is how to grow these businesses so that they are further embedded in our clients’ workflows,” she said. 

“In some instances, this next chapter is about introducing additional capabilities or increasing access with cutting-edge technology. But the overarching aim is to create a seamless solution for clients, connecting the dots between these franchises for enhanced efficiencies of scale and performance,” she added.

In April, BNY Mellon added FICC sponsored cleared repo onto its liquidity platform, LiquidityDirect.

“This is one of many such announcements you can expect in the coming months as we connect and build out our services so that not only can clients invest in a wide variety of short-end fixed income products in one place, but also meet their ESG investing requirements,” Majiyagbe said.

Majiyagbe joined BNY Mellon from Goldman Sachs, where she spent 14 years serving in a variety of positions, most recently as Global Head of Liquidity Projections in the firm’s Corporate Treasury division.

“I’ve spent my career in a variety of positions associated with financing, collateral and liquidity. These included managing the excess liquidity pool at Goldman; collaborating with the firm’s equities business across securities finance and prime brokerage; and managing the firm’s collateral and liquidity needs,” Majiyagbe said.

“I plan to use these experiences to create connections across our businesses so clients can maneuver seamlessly between our solutions, driving more value holistically than any one of those individual platforms can deliver individually,” she concluded.