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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