Single Collateral Management Rulebook for Europe (SCoRE)
In order to address this fragmentation, the Eurosystem’sAdvisory Group on Market Infrastructures for Securities and Collateral (AMI-SeCo) is working towards developing aSingle Collateral Management Rulebook for Europe (SCoRE), which defines common rules for managing collateral.
The harmonised collateral management processes laid down in SCoRE will ultimately make it easier for:
- market participants to move their securities and collateral safely and efficiently between EU countries, without friction or restrictions;
- investors to buy securities in any EU country and use them as collateral in the same or any other EU country;
- banks to move collateral and securities quickly to where they are needed.
It will also lead to:
- increased efficiency, by enabling collateral management across Europe from a single account using the same procedures;
- lower costs, as a single rulebook will allow market participants to implement a single set of procedures;
- interoperability, resulting from common messaging based on a common set of data across financial market infrastructures;
- lower risk in managing securities and collateral as a result of the standardisation of processes;
- a level playing field for all market participants across Europe;
- increased reach beyond domestic markets.
What activities are covered?
The AMI-SeCo identified ten areas where further harmonisation was needed.
Harmonisation of triparty collateral management workflows and messaging in order to facilitate interoperable processes allowing collateral mobility across triparty agents.
Harmonisation of Corporate Actions processes, workflows and messaging by reinforcing existing harmonisation standards or adding new harmonisation standards (taking into account specific considerations from a collateral management perspective).
Harmonisation of tax processing in the context of collateral management (taking into account identification of parties in collateralised transactions).
Harmonisation of workflows for bilateral collateral management (covering non-cleared OTC derivatives and securities financing). Interoperability and leverage of existing infrastructures and market platforms.
Interoperability and leverage of existing infrastructures and market platforms for margin processes.
Harmonisation of billing procedures, workflows and messaging.
Minimum requirements for end-of-day cut off times to avoid possible different value dats in cross-infrastructure transactions in different markets, which may create frictions for market participants active in different markets.
Harmonisation of data exchanges to ensure that information / data is available where necessary. Market practices needed for use of data.
Miminum requirements for sourcing/movement of collateral across Europe.
Market practices for the handling of non-euro denominated collateral (including related corporate action processes).
What standards have been agreed?
Standards have already been agreed in three of these areas:
Triparty Collateral Management
A single triparty model for Europe with common processes for interaction between all major European triparty service providers and their participants, including the Eurosystem, using ISO 20022 messaging.
Triparty Collateral Management: Single Collateral Management Rulebook for EuropeBilling Processes
A single set of rules for the transmission of billing information by post-trade service providers related to custody and collateral management, including the alignment of billing frequency and dates and using ISO 20022 messaging.
Billing Processes: Single Collateral Management Rulebook for EuropeCorporate Actions
A first set of harmonised business processes and workflows for debt instruments, foreseeing the use of ISO 20022 messaging. Work on other instruments, such as equities, is ongoing.
Corporate Actions: Single Collateral Management Rulebook for EuropeThe AMI-SeCo has also defined aframework for monitoring the implementation of the standards. Work to define standards in the remaining areas is ongoing.
How are we moving towards harmonisation?
A dedicated taskforce (CMH-TF) under the AMI-SeCo brings market participants together to define common rules for managing collateral in Europe. There are three steps in the SCoRE process, from defining to implementing the standards.
Define market-wide standards with industry players
Ask them for a plan for adoption of the Standards within agreed timelines
Monitor their progress against the plans
Find out more about related content
SCoREBOARD reports
SCoREBOARD reports are part of a series of regular reports published by the AMI-SeCo covering the progress made in defining and assessing compliance with the standards included in the SCoRE.
read more