What is triparty required value?

It’s the value of collateral required by a lender in exchange for a securities loan, such as stocks. Triparty collateral management involves third party agents to intermediate the exchange of collateral.

Where have you heard about triparty required value?

The use of collateral in lending is a long-standing practice, but now it’s being updated for the 21st century. New tools are being developed that allow more automatic processing of triparty required value (RQV) services.

What you need to know about triparty required value.

Triparty RQV is fulfilled through a combination of collateral types, such as equities, government bonds, convertible bonds, cash or other financial products.

Collateral requirements can be very complex, and traditionally involve a lot of manual operation and detailed accounting to assess how heavily traded the securities are, their minimum price, specific indices and redemption dates.

However, service providers are increasingly automating processes to make them more efficient and transparent. Vendors that provide triparty RQV services include JP Morgan, Pirum and Euroclear.

Find out more about triparty required value.

For background information, read our definitions of triparty agreement and collateral.