The bank developed MarginDirect by combining two of its services, custody and MoneyFunds Direct, into a single solution managed by its liquidity services group.

MarginDirect provides safekeeping for posted margin balances away from a hedge fund's over-the-counter derivative trading counterparties, and thereby reduces the hedge fund's risk exposure.

Margin assets received on behalf of clients are targeted for investment through MoneyFunds Direct, the bank's online liquidity portal that provides direct access to more than 100 money market funds in multiple currencies, as well as individual money market securities, on a single centralised investment and reporting platform.

MarginDirect's key service features include the establishment of multiple accounts for each hedge fund counterparty, straight-through-processing for optimum transaction speed, and robust reporting for the hedge fund and its counterparties via both traditional periodic reports and online updates.

In addition, MarginDirect offers real-time reporting on all margin activity.

'MarginDirect reflects our commitment to helping our clients succeed in the current credit environment,' says Jonathan Spirgel, managing director and global head of liquidity services at Bank of New York Mellon.

'Hedge funds need access to resources that measure up to today's challenging market conditions, and MarginDirect can serve as a single and complete solution for managing margin positions, account data and money market investments.'