Clearstream and Iberclear will grow Spanish collateral management service
22 May 2012 Frankfurt
Image: Shutterstock
Iberclear, the Spanish central securities depository and subsidiary of BME, and the international central securities depository Clearstream have signed an agreement to develop a new tri-party collateral management service for the Spanish market.
The service will target the collateralisation of exposures in the Spanish market of Iberclear clients. In the first phase, it will cover the exposures resulting from domestic repo transactions, including the possibility of pledging received assets from a repo transaction with the Spanish central bank (Banco de España) in order to get access to central bank money.
The service will be launched ahead of regulatory changes that will require financial and non-financial institutions to improve their liquidity and collateral management efficiency. Through the Liquidity Hub GO (Global Outsourcing) service, it is hoped that Iberclear clients will be in a position to handle their domestic collateral holdings and exposures more efficiently, while keeping them in the domestic Spanish environment.
Jeffrey Tessler, CEO Clearstream, said: “It's a strategic priority of Deutsche Börse Group to make global markets more robust through risk and liquidity management solutions such as Clearstream's collateral management outsourcing service. Collateral has become a very scarce resource and sourcing good quality collateral is increasingly expensive."
José Massa, Chairman of Iberclear, said: "The service is a major step forward for Iberclear and the Spanish market as it will allow our clients to manage their collateral holdings and exposure more efficiently without moving it out of Spain."
Iberclear will build on this initiative to broaden its range of custody services.
Clearstream's Liquidity Hub GO service went live with the Brazilian CSD Cetip in July 2011. Since then further development plans have been announced between Clearstream and the Australian Securities Exchange (August 2011), the South African CSD Strate (January 2012) and the Canadian CSD CDS (March 2012).
The Accenture/Clearstream report "Collateral Management: Unlocking the Potential in Collateral", published in September 2011, revealed that the financial services sector could save more than €4 billion annually in collateral management costs by addressing operational inefficiencies.
The service will target the collateralisation of exposures in the Spanish market of Iberclear clients. In the first phase, it will cover the exposures resulting from domestic repo transactions, including the possibility of pledging received assets from a repo transaction with the Spanish central bank (Banco de España) in order to get access to central bank money.
The service will be launched ahead of regulatory changes that will require financial and non-financial institutions to improve their liquidity and collateral management efficiency. Through the Liquidity Hub GO (Global Outsourcing) service, it is hoped that Iberclear clients will be in a position to handle their domestic collateral holdings and exposures more efficiently, while keeping them in the domestic Spanish environment.
Jeffrey Tessler, CEO Clearstream, said: “It's a strategic priority of Deutsche Börse Group to make global markets more robust through risk and liquidity management solutions such as Clearstream's collateral management outsourcing service. Collateral has become a very scarce resource and sourcing good quality collateral is increasingly expensive."
José Massa, Chairman of Iberclear, said: "The service is a major step forward for Iberclear and the Spanish market as it will allow our clients to manage their collateral holdings and exposure more efficiently without moving it out of Spain."
Iberclear will build on this initiative to broaden its range of custody services.
Clearstream's Liquidity Hub GO service went live with the Brazilian CSD Cetip in July 2011. Since then further development plans have been announced between Clearstream and the Australian Securities Exchange (August 2011), the South African CSD Strate (January 2012) and the Canadian CSD CDS (March 2012).
The Accenture/Clearstream report "Collateral Management: Unlocking the Potential in Collateral", published in September 2011, revealed that the financial services sector could save more than €4 billion annually in collateral management costs by addressing operational inefficiencies.
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