[ P E O P L E O N T H E M O V E | N E W S R O U N D - U P ]
NEWS IN CLEARING , COLLATERAL AND SETTLEMENT
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The Dutch State Treasury Agency has announced it will voluntarily begin central clearing of euro-denominated interest rate swaps through Eurex Clearing . Despite the Agency ’ s exemption from the obligation to clear swaps through a central counterparty ( CCP ), on the basis that it is a debt management office , the Dutch State Treasury Agency has opted to use Eurex Clearing to clear interest rate swaps centrally for risk management reasons .
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Northern Trust has become the first global custodian to implement a direct clearing service to the Canadian Derivatives Clearing Corporation ( CDCC ). The bank cleared the first lot of cash and repo trades on behalf of the Healthcare of Ontario Pension Plan ( HOOPP ).
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SIX has announced plans to lower prices for its custody and clearing services , following a wider restructuring of its securities business . SIX plans to reduce prices for Swiss custody and safekeeping services and reduce prices for international custody in certain markets .
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Societe Generale Securities Services ( SGSS ) broker-dealer clearing and settlement subsidiary , Parel , has extended its relationship with LCH EquityClear for another two years . With the renewal , Parel will continue to provide straight-through delivery versus payment ( DvP ) settlement services to LCH , as well direct access to the pan European settlement platform TARGET2 Securities ( T2S ).
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DTCC-Euroclear Global Collateral and financial technology group NEX have partnered to improve OTC derivatives margin call processes . NEX will now link its triResolve Margin web-based collateral management solution with GlobalCollateral ’ s Margin Transit Utility ( MTU ) to provide mutual clients with a centralised view across margin call operations .
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Citi will accept exchange traded funds ( ETFs ) as collateral in agency securities lending transactions , as custodians look to unlock the potential of the burgeoning products . With over $ 4.9 trillion in global assets under management , the ETF market is ripe for development in the securities lending space , though this has mostly only been utilised in the US .
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Outdated and legacy systems still in place at firms providing derivatives clearing must be replaced as the industry faces increased pressures . A whitepaper co-written by IBM , Minium and Promontory , examined the future for derivatives clearing and prime services , outlining existing problems with the industry and listing technology as one of the most important challenges .
˜ ˜ The Depository Trust and Clearing Corporation ( DTCC ) has set out plans to further speed up post-trade processes for the US equities market , following its transition to a T + 2 settlement cycle last year . Its proposal seeks to mitigate risks surrounding time in the settlement system by accelerating time-to-settlement and settlement optimisation .
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The Canadian Securities Exchange ( CSE ) has developed a securities clearing and settlement platform using blockchain technology . The platform allows companies to issue equity and debt through tokenised securities offered to investors via security token offerings ( STO ). Unlike initial coin offerings
( ICOs ), STOs are subject to full regulation by securities commissions .
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Eurex Clearing ’ s profit sharing scheme has continued to win clearing business from London since its launch , as the battle for euro-clearing continues . Average daily volume cleared in OTC interest rates surged to € 35 billion in January 2018 from € 5 billion in 2017 , Eurex said .
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Citi and CME Clearing have teamed up with Baton Systems to implement a blockchain-inspired platform as the firms look to reduce costs of back-office functions . The platform allows banks to view their collateral in their ledgers in real-time and send cash or securities to clearing houses with one-click .
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Banco Bilbao Vizcaya Argentaria ( BBVA ) has signed on to cloud-based derivatives clearing provider Sernova Financial ’ s clearing services . London-based Sernova will provide technology and operational house and client post-trade derivative solutions to the Spanish banking group ’ s collection of clearing houses and brokers .
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Clearstream has gone live with a new tri-party collateral management service enabling banks to mobilise assets across its central securities depositories ( CSDs ). As part of its enhanced asset servicing model for TARGET2 Securities ( T2S ), the OneClearstream collateral management service ( OneCMS ) allows assets to move across Clearstream Banking Luxembourg , its international CSD ( ICSD ), and its Frankfurt-based German CSD .
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IHS Markit has launched a new technology solution enabling FX traders to fully automate settlement and margin payments in the cross-currency swaps market .
6 Global Custodian Summer 2018