AP7 overcomes collateral hurdles

Businessman hurdleThe Swedish state pension fund AP7 has appointed BNY Mellon to provide derivatives collateral management services.

BNY Mellon is using its DM Edge – a margin management platform - in conjunction with its Triparty collateral management and Money Funds platforms to support AP7’s equity OTC derivatives trading, assisting with raising cash as collateral, reinvesting cash collateral and calculating margin call amounts. This is the first time that three of the platforms have been combined.

Svante Linder, chief operating officer at AP7, which has over €8.5bn under management, said: “BNY Mellon has helped us solve the problem of collateralising OTC [over-the-counter] derivatives when using an equity-based portfolio. The market is not favourable to using equities as collateral at the moment and working with BNY Mellon on a combined solution has helped us to overcome operational and legal hurdles.

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