November 05, 2015

BNY Mellon Leads Industry in Move to Automated Loan Documentation Process for Investment Managers

Corporate Trust Takes 65 Percent of Market in Loan Notification System

BNY Mellon’s Corporate Trust group, by incorporating technological innovations, has seized a commanding lead in utilizing a new automated system that transmits key information for investment managers that trade loans.

“This is an example of BNY Mellon's ability to integrate leading technology from third parties to benefit our clients,” said Magnus Wilson-Webb, managing director in BNY Mellon’s Corporate Trust group. “It is part of our strategy to develop technological solutions with firms such as Markit and other industry leaders that can be integrated into BNY Mellon’s NEXEN platform, further improving the experience for BNY Mellon clients.”

BNY Mellon earlier this year was among the first in the industry to introduce technology that takes advantage of a new trade settlement system introduced by Markit, which operates an industry standard electronic communications system. Markit dubbed its new system “Custodian Integration Document Delivery (CIDD).” Since the inception of this system in the spring of 2015, BNY Mellon has accounted for 65 percent of the 6,900 trades routed through CIDD by investment managers.

By accounting for nearly two-thirds of the trades on this new system, we’ve demonstrated our success in moving our clients to this innovative and comprehensive system,” said Wilson-Webb. “Our clients benefit from early investments that we made in technology to further improve our loan administration offering.”  

The service replaced a manual process that required investment managers to email or fax all documents related to loan trades, such as assignment agreements, transfer certificates and funding memos, to BNY Mellon in its capacity as trustee and collateral administrator.

Under the new system, BNY Mellon is notified as documents are executed on ClearPar, an electronic communications system operated by Markit. This enables BNY Mellon to begin processing trades earlier in their lifecycle. It is designed so that BNY Mellon’s records are aligned with those of its clients. Additional documents that can be transmitted include trade confirmations; purchase and sale agreements; and netting agreements.