SERVICES
Collateral workflows with transparent calls, disputes and settlement evidence.
Control margin obligations, eligible collateral, reconciliations and exceptions across counterparties and portfolios.
Overview
Collateral management supports the operational lifecycle of margin and collateral obligations arising from derivatives, financing and secured arrangements. It can include call intake/validation, exposure comparison, eligibility checks, settlement tracking, dispute management and collateral records.
Most relevant to hedge funds, derivatives-heavy portfolios, financing users and credit strategies with collateralised exposures.
Why it matters
Collateral activity generates frequent cash/security movements. Manual handling can create liquidity risk, missed calls and weak dispute evidence.
Common operating challenges
- High volume of margin calls.
- Exposure/collateral differences with counterparties.
- Eligibility/haircut rules hard to maintain.
- Late collateral settlement.
- Disputes tracked through email without structured evidence.
What we deliver
| Capability | What it covers |
|---|---|
| Call intake | Capture margin/collateral notices. |
| Validation | Compare calls to approved exposure/collateral data. |
| Eligibility support | Apply approved collateral terms. |
| Dispute workflow | Track differences, evidence and communication. |
| Settlement monitoring | Follow collateral movement to completion. |
| Reporting | Maintain inventory and obligation views. |
Our role can be configured around a defined operating mandate: a recurring managed service, a technology-enabled client workflow, or a co-sourced model in which execution and review are split between Kelton, the client and appointed providers.
Inputs, workflow and outputs
Typical inputs
- Counterparty margin calls
- Portfolio/exposure data
- Approved CSA/collateral terms
- Eligible collateral inventory
- Custodian/PB settlement records
- Cash balances
Controlled workflow
| Step | Activity | What happens |
|---|---|---|
| 1 | Receive | Capture call and contractual context. |
| 2 | Validate | Check amount, currency, thresholds and available collateral. |
| 3 | Agree / dispute | Route exceptions with supporting evidence. |
| 4 | Approve movement | Send authorised instruction to provider. |
| 5 | Monitor settlement | Confirm collateral/cash movement. |
| 6 | Reconcile & report | Update inventory and close exception. |
Typical outputs
- Margin-call dashboard
- Dispute queue
- Collateral inventory
- Settlement status
- Counterparty obligation view
- Audit evidence
Controls and review
The workflow is designed so that automation does not obscure responsibility. Routine processing can be standardised; exceptions, material judgements and formal approvals remain visible and attributable.
- Approved collateral rules/thresholds.
- Segregation of validation and release authority.
- Dispute escalation by materiality/age.
- Reconciliation to custody/PB records.
- No autonomous asset transfer.
Responsibility boundary
We support collateral operations and workflow. Formal custody, legal interpretation of agreements, financing and asset movement remain with authorised parties.
Technology & expertise
Our operating model combines specialist knowledge with controlled technology. Domain experts define the rules, review logic and exception criteria; the technology layer makes the workflow repeatable, traceable and scalable.
Technology
- Call ingestion.
- Exposure/collateral matching.
- Eligibility-rule engine.
- Dispute/SLA workflow.
- Inventory and settlement reporting.
Expertise
- Derivatives and secured-financing operations.
- Margin/collateral lifecycle.
- Counterparty reconciliation.
- Operational dispute management.
Expert knowledge is converted into controlled rules, SOPs, checklists, validation tests and exception criteria so that the operating standard is embedded in the workflow rather than dependent on one individual.
Delivery models
| Model | How it works |
|---|---|
| Managed Operations | We execute the agreed recurring workflow. Client and appointed-provider approvals remain explicit. |
| Technology Enablement | We implement the data, workflow and control layer for the client team to operate. |
| Hybrid / Co-sourced | Execution and review are shared through a documented responsibility and escalation model. |
| Transition & Implementation | We mobilise the workflow during a launch, provider change or target-operating-model transition. |
Frequently asked questions
Is this relevant to every fund?
No. It matters most for derivatives, leverage and secured-financing strategies.
Can it be outsourced selectively?
Yes. This is a common modular middle-office function.
Does Kelton interpret CSA legal terms?
Formal legal interpretation remains with counsel or other authorised parties; we operate the approved terms and workflow.
Discuss Collateral Management
Start with one workflow, one operating issue or one provider transition. We will map the current process, responsibility boundaries, required data and a practical first engagement.