Northern Trust claims a Canadian first 30 April 2018Toronto Reporter: Jenna Lomax
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Northern Trust is set to implement a direct clearing of cash and repurchase agreement (repo) trades for fixed income securities through the Canadian Derivatives Clearing Corporation (CDCC), clearing trades on behalf of the Healthcare of Ontario Pension Plan (HOOPP).
Northern Trust said it is the first global custodian to use the CDCC.
Created in 1960, HOOPP is a multi-employer contributory defined benefit plan for Ontario’s hospital and community-based healthcare sector with 548 participating employers.
Its membership includes nurses, medical technicians, food services staff and housekeeping staff, and many other people who work hard to provide Ontario with valued healthcare services. It has more than 339,000 active, deferred and retired members.
Northern Trust added that HOOPP and three other large buy-side organisations were invited to apply to become limited clearing members (LCMs) by the Bank of Canada in order to participate in an expansion of direct clearing announced in 2017 by the CDCC, for exchange-traded derivative products, certain over-the-counter products and repos.
Said HOOPP president and chief executive officer Jim Keohane: “Partnering with Northern Trust strengthens our investment ability since many of our investment strategies rely on repo financing to make them work.”
“This new set-up will make HOOPP a more attractive counterparty for the banks and should ensure liquidity from this source during severe market downturns, which is good for our members.”
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