SURVEY | TRI-PARTY SECURITIES FINANCING

Tri-party securities financing

Mobilising global will be a key challenge for 2015, and tri-party finance could be a solution.

inancial institutions are now financing discussion. Traders can for answer to the first question is positive. responding to the full implications the most part adapt trading strategies However others, especially after the Fof the Basel III rules for , over time to increased costs. What ECB announced its plans to effectively liquidity coverage and net stable they cannot comfortably deal with is a take over one trillion euros out of the funding. Financing conversations sudden loss of funding availability. market in the next eighteen months, used to be about cost and collateral As well as the micro level implications are not so sure. Everyone is however ‘haircuts’. In a world of almost unlimited some bigger systemic questions remain pretty much agreed that the answer to leverage, availability was taken as a outstanding. Industry leaders we have the second question is negative. Most given. Whatever the uncertainty around spoken to believe two big questions participants agree with the base case the detail of the implications of new remain unanswered, namely: “Is there assumptions that there is an excess of regulations for individual relationships, enough collateral and is it in the right collateral available in North America it is clear that availability is the very first place?” Opinions vary as to the answers. and Asia, especially Japan, and shortage and now most important preface to any Some are reasonably confident that the in Europe. The fact that this view is

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Industry leaders we have becoming more common as unsecured single or at least standard documentation lending to banks has assumed increased processes and procedures is allowing spoken to believe two big risk; real, perceived and regulated. This tri-party to help deal with some of questions remain unanswered, means that new players, especially non- the collateral supply problem. What bank institutions want to find ways to the major providers are positioning namely: “Is there enough take collateral against lent. Second, themselves for however is much more collateral and is it in the planned increased capital requirements strategic and attuned to the global generally, as well as the specific capital market shifts. Financing discussions right place?” requirements associated with different with clients across the industry are types of lending, have caused lenders to much more strategic than they were begin to think seriously about whether previously. so widely held leads inevitably to the and if so how, they will accommodate Clients want to know what solutions conclusion that big challenge for 2015 client needs for all forms secured are being developed, especially globally, and beyond is how to mobilise all lending in future. to facilitate access for them to more available collateral to optimise its value Tri-party has many attractions as counterparties, borrowers and lenders. to both its owners, and to those using institutions look to expand collateralised The key is assisting clients access it to facilitate and exploit the most lending business. Leading providers, collateral wherever it may be held attractive trading opportunities. namely the ICSDs in Europe and BNY around the world. Global custodians Every bank and broker dealer is Mellon and J.P. Morgan, continually like BNY Mellon and J.P. Morgan affected by the changes and therefore stress that tri-party is a proven, robust have an opportunity to leverage the solving the collateral challenge is a and scalable model. As a result it is expertise and systems already in place. matter of common interest as well as now being used not just by traditional Meanwhile , a concern for each firm individually. clients such as banks and dealers, but and SIX Securities Services do not call And it is not only in respect of their increasingly by corporates concerned themselves global custodians, but often own business that large dealers are about bank risk exposure and central act like them with network managers, impacted. Important prime broker hedge banks for open market operations global and asset servicing fund clients, many of who depend on among others. expertise and sophisticated technology financing availability, are also wondering being increasingly deployed to support about the implications of change on Broadening the scope as much as the very existence of some strategies, At the same time traditional users of straightforward custody activity. While let alone their viability in light of tri-party are broadening its use to cover local market laws and regulations lower returns. collateral related to derivatives trading will not go away, their impact can be From a pure trading perspective and intra-group activities. An expansionist reduced through a combination of the requirements needed to solve the view of the business is shared by all expertise and innovation. collateral availability problem are easy providers. In Europe Euroclear and As tri-party providers look to play to state and, with a few caveats, not Clearstream are both witnessing a fairly their part in the mobilisation of global necessarily hard to execute. Solving steady and continuous move of business collateral and the expansion of market the issue operationally however, from bilateral arrangements to tri-party as participation it is clear that standing still whether in terms of documentation, its operational advantages become ever is not an option. New solutions will , settlement processes more obvious. In the U.S. market BNY be developed in response to evolving or technology, are very significant. Mellon has seen a similar situation with demand. Current providers are well Given the breadth of revenue streams more counterparties involving themselves positioned by virtue of their existing potentially affected and their size, sorting in tri-party even while overall market business and client relationships. out the issues is the key priority for volumes are not necessarily growing However the path ahead is even 2015. The question being addressed significantly. Meanwhile SIX Securities more uncertain than usual in the area by all five of the key tri-party financing Services, the smallest provider in the of collateral management and the institutions is where and how best can Survey, is benefitting from the fact that challenges are unique. Against such tri-party contribute to the solution of the it can offer access to the Swiss market, a background the future will most bigger collateral challenge. which remains a key global financial hub. likely belong to the providers with the Two important strands are clear from So the facilitation of access to multiple broadest vision and the willingness and our review. First collateralised lending is counterparty relationships through a capacity to execute against it. n

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provider and taker of collateral. However the growth in the Survey overview number of non-bank participants is reflected in the fact that 30.1% of respondents are takes of collateral only, i.e. they are lending cash against . Almost one in four respondents ri-party financing is no longer simply a bank and dealer is purely engaged in financing, being solely involved in the Tactivity. Figure 1 shows the nature of the institutions market as collateral providers. responding to the 2015 Survey. While responses from banks When asked about the nature of securities included within and dealers are still the most prevalent, there is a noticeable different programmes the results reflect traditional activity but contribution from non-bank financial institutions including some also hint at new trends emerging in the marketplace. Figure corporate treasury desks, as well as other respondents such 5 looks simply at the securities in general terms. This shows as systems. The nature of bank responses also now that very few participants use the market purely for equities, includes private banks and wealth managers, and local and but a surprisingly large number (37.0%) use tri-party for both regional savings banks, as well as major global institutions. Based fixed income and equities. So the majority of more than 60% on comments made by providers as part of the Market Review, continue to run programmes that exclusively involve fixed this trend may be expected to continue in the years ahead. income trading. Looked at in some more detail, Figure 6 breaks As well as who is now responding to the Survey, there is down the activity between different fixed income securities that the question of the particular rationale for using tri-party as are included in the assets involved in tri-party as well as other opposed to bilateral collateral arrangements. Figure 2 shows a types of assets. This shows that 84.2% of respondents have near equal split between two core groups of respondents. First, sovereign debt in their programmes, with both convertible accounting for 41.8% are firms who are looking to mobilise and corporate debt as well as ABS/MBS each at around half their collateral pool as effectively as possible to maximise of that level. Equities are also included by a similar number of returns. Second, accounting for 41.1% are those that are using respondents. Overall the picture is one of an ever broadening tri-party to maximise access to counter-parties in the most array of collateral engagement in these programmes in efficient way. As was noted in the Market Review, it is not response to changing market dynamics. In terms of currencies simply how many counterparties are involved it is also the the one unexpected feature is the extent to which sterling is nature of the documentation and legal process that is involved. involved. Sterling is included in the tri-party programmes of A little under 20% of respondents are using tri-party for other 76% of all respondents. This is the highest participation of any reasons specific to their own circumstances. currency. U.S. dollars are part of the programmes of 67.8% of Where tri-party is being used, its influence appears to be respondents, while Euro is included in the activity of only a increasingly pervasive. Figure 3 shows that more than 50% little over one-third of respondents. That figure is still more of respondents use tri-party as the management process for than twice the number of respondents using Japanese Yen. more than 60% of their asset pool. For a significant minority, Figures 8 and 9 illustrate the priorities attached to different tri-party appears to be the only way in which they operate. aspects of tri-party services by respondents based on their However, there is another significant minority (18.6%) who identification of the key questions they regard as being use tri-party for less than 30% of their collateral activity, the most critical in their assessment of service provision. Figure rest being accounted for with bilateral arrangements. These 8 looks at the data across the four main categories of hybrid approaches appear likely to continue for some time as service. Not surprisingly all are to some extent important to the markets adjust to new rules and regulations, which in turn clients. Operational capability generated around one-third impact operational and legal processes and procedures. Figure of all mentions. This category includes deadlines, reporting 4 illustrates the roles taken by respondents in transactions. The capabilities and the levels of automated processing. Client largest number of respondents (45.9%) use tri-party both as a service and relationship management gained just over one-

Fig 1: Type of respondent Fig 2: Tri-party rationale Fig 3: Proportion of assets managed Fig 4: Tri-party usage

Bank – 39.2% Mobilise collateral – 41.8% 0-30% – 18.6% Collateral provider – 24.0% Dealer – 32.9% Access counter-parties – 41.1% 30-60% – 14.5% Collateral taker – 30.1% Non-bank institution – 20.3% N/A – 17.1% >60% – 53.1% Both – 45.9% Other – 7.7% No response – 13.8%

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quarter of mentions, and Value deliver, which includes fees as future. The second most important question was “Breadth and well as reputation and global capability, rated 22% of mentions. Range of Counterparties”. Once again the ability of providers Interestingly the collateral management process was responsible to offer as easy way for participants to access a broad range of for the least number of mentions. It would appear that clients counterparties through a single programme seems destined to take this aspect of service largely for granted. However, as become a major factor in how and to what extent individual Figure 9 shows Accuracy of Collateral Valuations is the fourth providers succeed in attracting new business and increasing most mentioned individual question within the survey gaining activity for current participants. just over 10% of mentions. With liquidity diminishing and As far as the scores in the survey are concerned, the overall prices of many fixed income securities increasingly hard to level was 5.56. This was marginally below the 5.62 recorded ascertain, valuations have become a key priority for clients and in the 2014 Survey but ahead of the 5.52 seen in 2013. Overall one which is a foundation of the tri-party service. The most the level of client satisfaction evidenced by the Survey remains important single question however, was “Understanding Client very high. A number of changes were made to the nature Business Needs”. In an environment where a tri-party agent of questions posed in the Survey in 2015 compared to prior has many responsibilities, knowing the particular concerns years. However Figure 10 shows comparisons between the of individual clients is hard. Those providers that do well in 2015 scores and the scores on the most directly comparable that area will be well placed to expand business further in the questions in 2014. In general the decline in scores is fairly consistent. Only one question “Collateral Reassignment” saw Fig 5: Securities traded Fig 8: Priorities by category scores move higher between 2014 and 2015. Interestingly the largest decline was seen in “Quality of Personnel” down 0.21 points year-on-year. Despite this decline the score was good with an average of 5.64. Possibly growth in the number of participants, transactions and complexity of the offering may all have affected scores in this area. “Deadlines” and “Sophistication of Collateral Screening” both saw scores lower by 0.18 points. Otherwise declines in scores on most questions were comparable to the overall shortfall. Within the four categories of service the best scores were seen in Relationship Management and Client Service. The average of Operations tech. & reporting – 32.4% Fixed income – 59.6% Relationship & client service – 26.9% Equities – 3.4% Product capability – 18.5% Both – 37.0% Fig 10: Overall survey scores by question Collateral management – 18.5% 2015 2014 Fig 6: Collateral managed Relationship & client service Understanding of your business needs 5.75 5.84 Sovereign debt 84.2% Quality & experience of front office relationship managers 5.89 6.01 Convertible debt 45.9% Quality & knowledge of client service personnel 5.64 5.85 Equities 42.5% Expertise in dealing with exceptions 5.46 5.53 ABS/MBS 40.4% Operations, technology & reporting Cash 53.4% Levels of straight-through processing 5.64 5.70 Letters of credit 6.2% Flexibility in handling substitutions & fails 5.55 5.63 Corporate debt 32.2% Efficiency & timeliness of calls 5.73 5.75 Competitiveness of deadlines (e.g. for cash movements) 5.55 5.73 Fig 7: Currencies included Quality of collateral servicing (e.g. tax, dividends etc.) 5.54 5.65 Quality, flexibility & timeliness of reporting 5.46 5.56 $ 67.8% Collateral management £ 76.0% Sophistication of collateral screening 5.41 5.59 34.2% Ability to exclude collateral 5.54 5.59 Yen 14.4% Satisfaction with collateral selection processes 5.54 5.69 Others 15.1% Accuracy of collateral valuations 5.64 5.70 Collateral reassignment/re-hypothecation/upgrade processes 5.46 5.38 Fig 9: Most important questions Product capability Breadth of range of counterparties given access to 5.54 5.60 Understanding business needs 14.8% Breadth of range of securities, asset classes & transaction types 5.62 5.67 Breadth & range of counterparties 10.6% Availability of service on a global basis 5.56 5.54 Straight-through prcessing 10.6% Ability to source lower cost &/or higher yield 5.35 5.39 Accuracy of collateral valuations 10.2% Value received for fees charged 5.23 5.29 Handling substitutions & falls 6.5% Total 5.56 5.62

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5.68 reflected generally very good results for all providers with of relative performance. Together with comments received the exception of J.P. Morgan. Across all providers a number of from clients, these form an important part of the provider individuals were singled out for praise, and personnel quality evaluations that follow. Where scores appear to be inconsistent was the most commonly mentioned service strength noted by or comparisons between providers are unclear, we have used respondents. Overall results for Clearstream in this category these ‘head-to-head’ assessments to determine the relative averaged better than 6.0 which is a particularly impressive progress of different providers. n performance. Collateral Management saw good scores for both Euroclear and Clearstream but the overall average was Methodology marginally lower this year. Sophistication of Collateral Screening Survey respondents were asked to provide a rating for each tri-party and the Collateral Selection process were two areas where securities financing provider on a numerical scale from “1” (Unsatisfactory) scores fell by above average amounts. BNY Mellon scored to “7” (Excellent), covering 10 separate functional services. In general “5” strongly in Operations, technology and Reporting and while (good) is the ‘’ low score of respondents. In total five providers received a record number of more than 250 responses from more than 150 overall scores were lower by 0.09 points they remain consistent individuals yielding thousands of data points for analysis. with prior years. The most interesting decline in scores was Each evaluation was weighted according to three characteristics of seen in terms of Deadlines. This is an area where clients each respondent; their size, represented by the value of assets under management; the level of complexity of their business based on the range can probably never be completely satisfied and satisfaction of services used; and the number of different providers involved. In this generally is high. Finally in product capability, Clearstream and way the evaluations of the largest and broadest users weighted at up to BNY Mellon appear to be seen as most comprehensive and three times the weight of the smallest and least experienced respondent. In 2014 the Survey highlighted in a Roll of Honour for each functional innovative in their approach. As transaction complexity grows, area, two providers who outperformed other providers taking account whether by geography, asset class or strategy, the ability to the number, nature and content of responses received. The small number facilitate client requirements in innovative ways that optimise of providers and heterogeneous nature of respondents and feedback from readers has led us to conclude that such an approach is not capital use will become ever more important. appropriate for this survey in 2015. We remain extremely grateful to those Finally it should be noted that a large number of respondents respondents who invested the time and effort to complete the survey. use and provided evaluations for multiple tri-party providers. Securities financing is a major issue for all market participants in 2015, as new regulations come into play. Being able to present a comprehensive Although services are not always directly comparable, the assessment of one key component of the financing equation adds greatly results from this group do provide an essential snapshot to readers’ understanding of the emerging overall position.

analysis, particularly when contrasted directly with J.P. Morgan. BNY Mellon However, a number of clients did express reservation about some of the set-up procedures and making amendments NY Mellon enjoyed another successful year within the to profiles. Others suggested that collateral process and BSurvey, scoring at high levels with an especially good focus operations were sometimes rather too rigid. on key client priorities. On four of the five most important BNY Mellon has broadened and extended its tri-party offering questions BNY Mellon beat the Survey average, in most cases very significantly in recent years. It has become a much more quite comfortably. The only area where it underperformed was significant global programme manager for clients. Overall, this has the in Handling of Substitutions and Fails and even here its score been welcomed and satisfaction levels are high. However, some of 5.46 was very acceptable. As with Clearstream however, BNY processes and procedures may need more investment to keep up Mellon could not quite match the excellent scores recoded in with the growth in complexity and scale of the business. n 2014. In three of the four categories scores were lower, though positive progress was recorded in Relationship and Client Category scores Service. BNY Mellon earned praise from clients for adapting to changing client priorities as well as general levels of capability, 2015 2014 Difference expertise and engagement. Furthermore BNY Mellon appears to Operations technology and reporting 5.68 5.71 -0.03 be doing a good job as far as product expansion is concerned. Relationship and client service 5.68 5.53 0.15 One client comment was “Broad global support for a wide range Product capability 5.57 5.75 -0.18 Collateral management 5.50 5.54 -0.04 of transactions, asset classes and counterparties” while another saw the bank as offering “the best range of counterparties for Most important question scores global activity”. Among clients using multiple providers, BNY Mellon BNY Mellon Survey Difference performed well. While scores from this group were generally Understanding business needs 5.87 5.75 0.12 lower BNY Mellon was comfortably the second highest in Breadth and range of counterparties 5.71 5.54 0.17 terms of overall scores and achieved the best scores on a Straight-through processing 5.73 5.64 0.09 number of questions including Deadlines and Breadth of Accuracy of collateral valuations 5.70 5.64 0.06 Counterparties. It also performed well in direct head-to-head Handling substitutions and fails 5.46 5.55 -0.09

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While one client has concerns about new client admission Clearstream processes, this probably reflects new regulations, rather than a specific criticism of Clearstream. Responses came from a large number of important market learstream had another excellent year in 2015. “Great participants. While some specific items were noted as areas for Cknowledge of our business and how we like to work” improvement, these were outweighed by the very positive tone was a comment that summed up Clearstream’s impressive of comments in support of high scores awarded. Clearstream ability to get to grips with what its clients want. Clearstream has ambitious plans for the future development of it collateral is “flexible with a strong client focus” according to one client, management businesses including tri-party. It is no doubt while another praised its “ability to quickly adjust collateral working to address specific concerns and developing new eligibility parameters”. As well as achieving an average score of capabilities to help keep it ahead of its main competitors. n more than 6.0 in the Understanding Business Needs category, Clearstream was ahead of the Survey average in all aspects Category scores of service and indeed on all questions. Across clients using multiple providers Clearstream also scored strongly and did well 2015 2014 Difference in the situations where it was being evaluated head-to-head. Operations technology and reporting 5.76 5.76 0.00 Relationship and client service 5.68 5.66 0.02 Arguably the only disappointing aspect of the results was Product capability 5.47 5.56 -0.09 that scores were marginally lower than in 2014 in both Product Collateral management 5.52 5.55 -0.03 Capability and Collateral Management categories. Even here however, scores averaged around 5.50. This represents a very Most important question scores strong performance. On the five most important questions Clearstream beat the Survey average by between 0.09 and 0.29 Clearstream Survey Difference points. Strengths as perceived by clients include the proactive Understanding business needs 6.04 5.75 0.29 approach of relationship managers and more specifically access Breadth and range of counterparties 5.68 5.54 0.14 to Eurex. One client’s only concern is that Clearstream does Straight-through processing 5.86 5.64 0.22 Accuracy of collateral valuations 5.73 5.64 0.09 not yet have enough counterparties using their capability, a Handling substitutions and fails 5.83 5.55 0.28 situation that performance at this level will surely help address.

being slow and too manual. Improvement in responsiveness is Euroclear however noted by a number of respondents. One major client commented “systems tend to be behind uroclear continues to earn high praise for having, as one current technology, hence delaying or preventing new product Eclient put it: “Best access to counterparties for fixed income deliverables”. The extent to which this perception becomes financing activity”. It is also seen as having very high calibre widespread will affect Euroclear’s ability to develop its business personnel who are extremely knowledgeable as well as a further. Across almost 100 respondents a range of opinions is solid and stable collateral management system. Competing on to be expected and the position remains very sound. However a global scale, across multiple asset classes is a challenge that high ambitions may require more exceptional experience for Euroclear is well placed to meet. clients to be successful. n This is despite the fact that scores in 2015 were lower across the board, with declines of between 0.05 points and 0.27 points across four categories of service. Though lower, Category scores scores remain at generally very satisfactory levels averaging around 5.50. 2015 2014 Difference Of perhaps more concern is that Euroclear scored below the Operations technology and reporting 5.44 5.71 -0.27 average on all five key questions and also ranked fourth in Relationship and client service 5.50 5.73 -0.23 terms of the assessment of clients using multiple providers. Its Product capability 5.38 5.46 -0.08 Collateral management 5.57 5.62 -0.05 performance in direct head-to-head comparisons was slightly better. It was still below Clearstream more often than it was Most important question scores ahead and still weaker than it might wish given its plans for future development. Euroclear Survey Difference Euroclear is criticised for not being ‘client centric’ enough Understanding business needs 5.54 5.75 -0.21 and also for the complexity of some of its technology. One Breadth and range of counterparties 5.48 5.54 -0.06 client believes service would benefit from a single point of Straight-through processing 5.48 5.64 -0.16 contact while another is concerned that Euroclear is simply too Accuracy of collateral valuations 5.60 5.64 -0.04 big to respond quickly to requests for changes. Some view it as Handling substitutions and fails 5.44 5.55 -0.11

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“slow to deliver new products”. Another client cited the bank as J.P. Morgan making “slow progress to overcome product limitations, with no proper follow-up to on-line actions.” The only positive for J.P. Morgan is that things are unlikely t would be hard not to improve from the level of scores to get any worse. Some clients appreciate its ability to handle Iseen by J.P. Morgan in the 2014 Survey. However in spite of a wide range of securities and asset classes as well as its global better scores in both Operations and Collateral Management, capabilities and range of counterparties. Nonetheless it would overall performance was worse in 2015 than the year before. appear that J.P. Morgan is failing to keep up with changes J.P. Morgan failed to beat the default 5.0 level representing in client requirements and technology developments. If that satisfactory performance in any of the four categories. continues even clients with long standing relationships may Scores for Product Capability were down 0.37 points on the feel that their business should be concentrated elsewhere. n disappointing level of 4.83 in 2014, giving a score of 4.46 this year. On the five questions of most importance to clients, J.P. Category scores Morgan was below the average of all respondents by between 0.58 points (Handling Substitutions and Fails) and 0.95 points 2015 2014 Difference (Breadth and Range of Counterparties). At these levels the Operations technology and reporting 4.96 4.83 0.13 Relationship and client service 4.70 4.91 -0.21 whole basis of the business must be considered under threat. Product capability 4.46 4.83 -0.37 Nor is the performance attributable to a few isolated clients or Collateral management 4.70 4.58 0.12 situations that do not involve competitors. Among respondents using multiple providers J.P. Morgan was consistently last among Most important question scores providers covered by the Survey averaging 0.84 points below its best placed competitors. In direct comparison with BNY Mellon, J.P. Morgan Survey Difference 75% gave BNY Mellon better scores than J.P. Morgan with less Understanding business needs 4.91 5.75 -0.84 than 20% putting J.P. Morgan ahead. Among these clients J.P. Breadth and range of counterparties 4.59 5.54 -0.95 Morgan scored lower on every question and was 1.4 points Straight-through processing 4.82 5.64 -0.82 Accuracy of collateral valuations 4.91 5.64 -0.73 behind in Effectiveness of Collateral Reassignment. Major clients Handling substitutions and fails 4.97 5.55 -0.58 consider J.P. Morgan to be “Not collateral provider friendly” and

considered a strong point of the service by a number of clients. SIX Securities However not all comments are positive. The SIX on-line system is criticised by one client as being cumbersome. Another he business of SIX Securities is smaller than that of the cites the lack of automated collateral substitutions while a Tother providers. Nonetheless SIX offers a good alternative third feels that current levels of IT development need to be to some of the traditional providers, remains highly regarded increased. Overall clients are generally more than satisfied with by clients in terms of its performance and as one client notes their relationship and performance. On the other hand there “SIX enables us to access the Swiss market and the SNB is nothing in the scores or comments to suggest that SIX can operations”. In terms of scoring this year, the relatively small quickly or easily catch the larger market participants. n number of respondents means that SIX scores are more volatile than others. The average score was lower in two categories (Operations, Technology and Reporting as well as Product Capability) but higher in two, with particular improvement Category scores noted in scores for Relationship and Client Service (up 0.27 points). Scores on key questions however were lower than the 2015 2014 Difference Survey average in four of the five areas covered. The exception Operations technology and reporting 5.48 5.54 -0.06 here was Accuracy of Collateral Valuations, where Clearstream Relationship and client service 5.80 5.53 0.27 scores, averaging 5.91 were outstanding. Product capability 5.14 5.28 -0.14 Collateral management 5.21 5.07 0.14 The scores from clients using multiple providers are perhaps not so important for SIX. Overall its performance was very Most important question scores creditable, ranking below BNY Mellon and Clearstream, but ahead of Euroclear and J.P. Morgan. SIX scored particularly SIX Securities Survey Difference well in Sophistication of Collateral Screening and Accuracy of Understanding business needs 5.72 5.75 -0.03 Collateral Valuations where it performed better than all other Breadth and range of counterparties 5.28 5.54 -0.26 providers, albeit with fewer responses. Straight-through processing 5.58 5.64 -0.06 Client comments praise the “Understanding of our business Accuracy of collateral valuations 5.91 5.64 0.27 by client service and front office managers”. STP is also Handling substitutions and fails 5.34 5.55 -0.21

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