May 22, 2012
Clearstream brings collateral service to Spain
Iberclear, the Spanish central
securities depository (CSD), and Clearstream have signed an agreement to
develop a new tri-party collateral management service for the Spanish market.
The service will target the
collateralisation of exposures in the Spanish market held by Iberclear clients
and will initially cover exposures resulting from domestic repo transactions,
including the possibility of pledging received assets from a repo transaction
with the Banco de España as a means of accessing central bank money.
The joint solution will be
launched ahead of a multitude of regulatory changes that will require financial
and non-financial institutions to improve their liquidity and collateral
management efficiency. Under the new rules, implemented through the European
market infrastructure regulation, market participants will need to hold
collateral against centrally-cleared OTC derivatives trades that were previous
transacted bilaterally.
Iberclear is the first
European post-trade services provider that will outsource the allocation,
optimisation and substitution of domestic collateral to Clearstream’s Global
Liquidity Hub collateral management platform. Through the Liquidity Hub GO
(Global Outsourcing) service, Iberclear clients can handle
their domestic collateral holdings and exposures more efficiently while keeping
them in the domestic Spanish environment.
Jeffrey Tessler, CEO
Clearstream, said: “It’s a strategic priority of Deutsche Börse Group to make
global markets more robust through risk and liquidity management solutions such
as Clearstream’s collateral management outsourcing service. Collateral has
become a very scarce resource and sourcing good quality collateral is
increasingly expensive – we can help managing collateral holdings and exposures
much more efficiently.”
Iberclear will build on this
initiative to broaden its range of custody services. The management of
collateral will also cover international securities, furthering in this ways
its efforts to become the Spanish firm’s provider of choice for national and
international custody services.
José Massa, chairman of
Iberclear, said: “We have a strong and very productive commercial relationship
with Clearstream and we are pleased to continue developing new initiatives in
partnership. We are sure the new service jointly developed with our partner
will satisfactorily meet the demands of our clients, who in the current
environment need, more than ever, tools to securely and efficiently handle
their collateral. The service is a major step forward for Iberclear and the
Spanish market as it will allow our clients to manage their collateral holdings
and exposure more efficiently without moving it out of Spain.”
Clearstream’s Liquidity Hub GO
service went live with the Brazilian CSD Cetip in July 2011. Since then
Clearstream has entered into agreements with the Australian Securities Exchange
(August 2011), the South African CSD Strate (January 2012) and the Canadian CSD
CDS (March 2012) to develop outsourced collateral management services.
Reporting by Janet du Chenne, Global Custodian, an Asset International publication