IHS Markit Automates ETF Collateral Lists

IHS Markit has launched ETF Collateral Lists 2.0, the first automated solution to enable collateral receivers to proactively identify ETFs based on their risk criteria. According to a story in MarketsMedia news, with a broadened inventory of accepted securities and triparty agent connectivity to manage distribution, the lists can increase ETF collateral transparency and control by calculating daily risk scores. Prior to the availability of ETF Collateral Lists 2.0, the traditional process for selecting ETFs as collateral was often inefficient, cumbersome and reactive – lenders would have to manually screen the vast universe of ETFs available to identify those which suit the diverse requirements of beneficial owners. ETF Collateral Lists 2.0 solves for this by allowing custom search criteria to be set, which informs an objective methodology to screen the universe. The lists are produced daily and contain qualifying ETFs which physically hold the same underlying assets as those in the collateral receiver’s current eligibility program. Once defined, the solution continues to manage acceptable ETF inventory, by automatically identifying newly qualified ETFs and removing those which fall out of criteria.