BNPP Securities Services teams up with tri-party repo service

The partnership could see increased buy-side activity in tri-party repo.
BNP Paribas Securities Services (BNPP SS) is to begin offering the €GCPlus tri-party repo solution.

The deal will see BNPP SS provide clearing, settlement and custody services for its clients trading euro cash liquidity via €GCPlus, an initiative created by Banque de France, Euroclear and LCH.Clearnet.

The service provide secure euro cash lending with standardised baskets of collateral, enabling the re-use of collateral received either with Banque de France or other collateral takers.

Euroclear’s Cyril Louchtchay de Fleurian, head of collateral management and security financing, said BNPP SS’s support will open up access to the platform to those who are not natural clients of Euroclear.

“This deal with BNP Paribas Securities Services is a real game changer for €GCPlus. Today, many market players, primarily on the buy-side, cannot access it and BNPP SS will be able to onboard them indirectly,” he told Global Custodian.

“It is important for the buy-side to be included in the collateral community.”

BNPP SS will act as sole general clearing member of €GCPlus and will handle its legal relationship with LCH.Clearnet SA, posting required default fund contributions and pre-fund margin call payments on behalf of its clients. By using BNPP SS’s clearing and settlement system, these clients will also avoid some of the implementation costs linked to new clearing regulations.

Jean-Marc Baudot, head of clearing, custody and settlement products at BNPP SS, added: “Our clients are looking for ways to manage collateral efficiently, move it quickly and address their funding needs. €GCPlus is one of the products that help them do that. Consequently, we have devised a range of services designed to handle the various operational processes linked to trading €GCPlus.”

Euroclear and its partners have ambitious plans to grow the €GCPlus service during 2016.

Louchtchay de Fleurian said: “Our main focus in 2016 is to onboard new participants. We have made good market penetration so far, and are currently speaking to a large number of new participants, including major supranational institutions which, alongside the buy-side that BNPP SS will bring, will have an big impact on liquidity on €GCPlus.”