BNY has successfully piloted the first intraday repo trade settled through its triparty infrastructure, with UBS borrowing cash from Swiss Re while delivering collateral through BNY’s platform.
The pilot demonstrated the ability for market participants to instruct a same-day repo with a specified start and end time through BNY’s triparty platform – whereby the allocation and return of eligible collateral is settled and matured intraday against payment.
“We are continuously evolving BNY’s platform infrastructure to unlock new trading patterns for the market,” said Gesa Johannsen, executive platform owner, global collateral, BNY. “Complementing our new early morning maturity option for triparty transactions in the US, our intraday triparty repo solution is an important step towards providing more flexible liquidity management possibilities to our clients, enabling them to more efficiently fund their day-to-day operations.”
The intraday repo solution is designed to enable market participants to source liquidity for specified periods of time without the need to borrow for a full 24-hour period. For lenders, such as Swiss Re in this case, the solution can provide an opportunity to generate additional income on excess, idle cash.
Richard Hochreutiner, head of global collateral at Swiss Re, said: “This is a great way to deploy any otherwise dormant intraday cash and to contribute to market liquidity. Using BNY’s platform seamlessly builds on existing infrastructure and documentation.”
In April, Banco Santander and Rabobank also completed an intraday triparty repo transaction, executing trades in both directions — borrowing and lending — through BNY’s collateral platform.
In March, the custodian also announced a partnership with GLMX to enable buy-side clients to direct repo trades at the point of execution to BNY Mellon’s triparty platform.
The two firms said the integration comes off the back of growing demand from clients seeking to expand their BNY Mellon triparty usage beyond uncleared margin into repo financing, helping them to capture more benefits from being on the collateral platform.