Euroclear Collateral Highway
Euroclear’s global Collateral Highway is a fully open global market infrastructure to source and mobilise collateral across borders. It helps market participants move cash and securities from wherever they are held to serve as collateral for access to central bank liquidity, secured transactions such as repos and securities loans, and margins for central counterparties (CCPs) and bi-laterally cleared OTC derivative trades. |
Euroclear and the Depository Trust & Clearing Corporation (DTCC) have recenly signed a memorandum of understanding to create a joint collateral processing service which will significantly increase efficiency, reduce risk and support the growing collateral needs of industry participants.
Features
The Collateral Highway has multiple collateral
entry and exit points. The entry points are where collateral is sourced from
the Euroclear central securities depositories (CSDs); which includes agent
banks (BNP Paribas Securities Services, Citi and Standard Chartered), clearers
and CSDs located in any time zone. The securities are then transported to where
they are needed as collateral.
Once the join service with the DTCC is launched, it will
offer automatic joint transfer and segregation of collateral based on agreed
margin calls relating to OTC derivatives and other collateralised contracts.
The DTCC and Euroclear will also establish mutual links, permitting firms to
manage collateral held at both depositories as a single pool.
Onboarding
The Collateral Highway is open to all CCPs, CSDs,
central banks, global and local custodians, investment and commercial banks.
Custodians, agent banks and CSDs without a collateral management service are
able to use the Collateral Highway as their own for their domestic clients.