APG Asset Management to access Eurex’s ISA Direct for repo clearing

The move will allow clients to address market liquidity concerns as well as regulatory-driven challenges.

Pension fund investment manager APG Asset Management (APG) will start to access Eurex’s centrally cleared repo markets from mid-June 2022, via the latter’s ISA Direct clearing services.

The move follows Eurex’s decision to offer expanded access to its cleared repo business to the buy-side, announced last year – which gave hedge funds and other firms increased access to the scheme.

Access to Eurex repo markets will allow clients to address market liquidity concerns and regulatory-driven challenges, while also providing clients with access to opportunities to efficiently manage cash and securities collateral.

This will be beneficial to clients particularly due to regulatory changes such as the Uncleared Margin Rules, as well as the potential clearing obligation for pension funds.

APG’s clients will be able to trade repos with more than 150 participants registered with Eurex Repo, including commercial banks, supra nationals, central banks and government financing agencies.

Cash will also be able to be raised or invested securely and reliably using over 13,000 International Securities Identification Numbers (ISINs), which will in turn allow APG to expand its spectrum of available liquidity providers, while reducing counterparty risk and costs.

“The direct link to Eurex’s cleared repo markets is an important enhancement of our collateral and cash management capabilities,” said Jan-Mark van Mill, head of treasury and trading at APG.

“Thanks to Eurex’s ISA Direct clearing service, our clients are better prepared for the potentially upcoming derivatives clearing obligation for pension funds.”

With the addition of APG, Eurex’s pension fund clients now have over €1 trillion assets under management.

Eurex Clearing’s ISA Direct model is currently offered for repos as well as over-the-counter interest rates swaps (OTC IRS).

“Onboarding APG funds is the latest successful step in our efforts to open our centrally cleared markets to a greater diversity of market participants,” said Frank Odendall, head of securities financial product and business development at Eurex.

“Our ISA Direct model – available for both repos and OTC IRS – offers market participants tangible benefits in terms of risk management and collateral optimisation.”