BlackRock and Santander Corporate & Investment Banking (CIB) have partnered to launch a new offering in the Mexican repurchase agreement (repo) market.
Sergio Mendez
The firms have unveiled the first fully electronic trading solution for the repo market in the jurisdiction, with the offering operated through the Tradeweb Markets platform. Mexico is the first country in Latin America to take this step.
Sergio Mendez, country head for Mexico at BlackRock, said: “Trading Mexican repos through our Aladdin platform and Tradeweb represents a radical change. It expands our clients’ trading capabilities and improves operational efficiency.”
The launch is aimed at replacing manual processes with a seamless end-to-end route – from RFQs to execution, as well as bolstering post-trade fund allocation, and collateral assignment.
BlackRock and Santander CIB are aiming to promote transparency and operational efficiency through the move and support the region as it continues to develop its capital markets processes through enhanced market structure and digitalisation.
The move is set to place Mexican repos at the fore of Latin American innovations, and according to an official Tradeweb announcement, the solution aims to bring repo operations to the level of markets such as Europe or the United States.
Luis Betancourt Barrios, head of markets at Santander Mexico, explained: “This launch, which positions Santander as a leader in market structure and digitalisation in the region together with partners such as BlackRock and Tradeweb, represents a milestone in innovation in Mexican repos and opens a new era in these operations, projecting the country internationally.
“For our clients, it is a substantial step that, in addition to facilitating operations, allows them to reduce risks by automating processes.”
At present, users of BlackRock’s Aladdin OEMS can connect directly to the Tradeweb platform (with Mexican government securities available as collateral).
Additionally, Santander CIB is the first liquidity provider to connect to the platform, however additional dealers and clients with Mexican peso repo books are set to be onboarded by Tradeweb in the near future.