First euro repo cleared via sponsored clearing model on RepoClear SA
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First euro repo cleared via sponsored clearing model on RepoClear SA 10 December 2021France Reporter: Bob Currie
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LCH has recorded its first euro-denominated repo transaction via its sponsored clearing model through RepoClear SA, its government bond cash and repo clearing service based in Paris.
The transaction was executed on Tradeweb by PGGM, a Netherlands-based pension fund service provider, on behalf of Dutch pension fund PFZW, with Societe Generale standing as clearing agent.
In August, LCH RepoClear extended its sponsored clearing model to include euro-denominated debt clearing at RepoClear SA.
With this development, buy-side firms can now access repo clearing across 14 fixed income markets and two general collateral (GC) products, notably Term £GC and €GCPlus, providing clearing for UK gilt securities and ECB-eligible collateral debt securities.
Corentine Poilvet-Clediere, LCH SA head of RepoClear, collateral and liquidity, says: “The RepoClear Sponsored Clearing service for euro debt at LCH SA has opened up access for the buy-side to the largest pool of cleared repo liquidity in Europe. Providing direct access to deep and stable liquidity alleviates pressure on balance sheets whilst allowing further netting opportunities."
Poilvet-Clediere explains that during the first nine months of 2021, the clearing house’s members cleared a record €175.4 trillion in nominal euro debt and €198.8 trillion in cash value, processed across RepoClear Ltd and SA.
PGGM senior investment manager Paul van de Moosdijk says: “We are pleased to be the first Sponsored Member to clear a euro repo trade at RepoClear SA. This initiative by LCH is important for the market as it provides buy-side members access to LCH RepoClear’s liquidity pool, enabling better risk management, stability and operational efficiencies.”
Societe Generale’s managing director and global head of sales for prime services and clearing comments: “Further diversifying our repo clearing offering by sponsoring our clients into RepoClear SA’s deep liquidity pool allows them to benefit from capacity, choice and safe risk management, whilst increasing our capacity to appropriately intermediate the cleared euro repo market.
"Through our support for sponsored members, we look forward to working with RepoClear SA to bring the benefits of clearing to the buy-side.”
The extension of sponsored clearing at RepoClear SA builds on the sterling clearing offer available at RepoClear Ltd since 2017, with 27 funds now clearing sterling debt.
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