BNY Mellon has responded to a market practices group’s recommendation that exposures from forward-settling transactions, inclusive of agency mortgage-backed securities, be margined bilaterally starting early this month by expanding its service in this area.
The company has expanded its bilateral margining capabilities through its DM Edge product to include forward-settling MBS in a move aimed at helping counterparties manage these exposures as recommended by the Treasury Market Practices Group.
The group, which is sponsored by the Federal Reserve Bank of New York, recommends a two-way variation margin, exchanged regularly, as a way to manage risk because
BNY Mellon’s product does this by exchanging collateral, or margin, as protection against loss in event of default.
