Importance

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Abstract

A computer-implemented method and system for converting ineligible collateral including a plurality of differently securitized asset types into non-trust collateral eligible for use to cover a margin requirement for securities trading includes a processor and a memory coupled to the processor and a database configured to at least store financial information relating to the ineligible collateral, A network connection is operatively coupled to the processor, and the processor is configured to receive the financial information over the network and store the financial information in the database; create a plurality of universal collateral units (UCU) backed by the pool of ineligible collateral. Each of the created UCUs represents the non-trust collateral eligible for use to cover the margin requirement. At least a portion of the UCUs are issued as a letter of credit in an electronic form, and the letter of credit is made available to a clearinghouse or a central counterparty via the network connection.

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First Claim