Collateral Highway adds agency cash management platform
12 March 2013 Brussels
Image: Shutterstock
Newedge UK and EuroMTS will promote Euroclear’s Collateral Highway as a means of managing collateral for triparty repo transactions that are conducted on the firms’ agency cash management (ACM) platform in Europe after signing a memorandum of understanding.
The Newedge/MTS ACM platform, which was launched in January 2012, is the only auction-driven system for triparty repo transactions between cash and collateral providers that is geared towards the institutional repo market.
Cash providers are generally hedge funds, pension funds, corporates, central banks, family offices, investment managers and bank treasurers, while collateral providers are usually investment banks, commercial banks and asset managers.
It will be the first triparty repo auction platform to use the Collateral Highway.
The MoU between Newedge, MTS and Euroclear will also see them jointly marketing the Collateral Highway and educating existing and potential non-bank clients about its advantages.
In a statement, Tim Howell, CEO of Euroclear, said: “The agreement with Newedge and MTS will go very far in ensuring best execution of ACM triparty repo deals on a straight-through basis. Given the caution with which market participants are managing risk in the current environment, the Collateral Highway helps cash givers and receivers mitigate counterparty risk by easily collateralising credit exposures with diversified pools of securities on a segregated basis."
"We are delighted to work closely with Newedge and MTS as a post-trade provider for the ACM market. We are well equipped to work with even more counterparties, including non-bank institutions, to bring additional and welcome liquidity to the European repo markets.”
Jack Jeffery, CEO of MTS, added: “The ACM platform was launched in response to demand from customers for secured money market investments and the transparency offered by electronic trading. We recognise the sophistication and appeal of Euroclear’s Collateral Highway and the advantages it will bring to our present and future participants.”
The Newedge/MTS ACM platform, which was launched in January 2012, is the only auction-driven system for triparty repo transactions between cash and collateral providers that is geared towards the institutional repo market.
Cash providers are generally hedge funds, pension funds, corporates, central banks, family offices, investment managers and bank treasurers, while collateral providers are usually investment banks, commercial banks and asset managers.
It will be the first triparty repo auction platform to use the Collateral Highway.
The MoU between Newedge, MTS and Euroclear will also see them jointly marketing the Collateral Highway and educating existing and potential non-bank clients about its advantages.
In a statement, Tim Howell, CEO of Euroclear, said: “The agreement with Newedge and MTS will go very far in ensuring best execution of ACM triparty repo deals on a straight-through basis. Given the caution with which market participants are managing risk in the current environment, the Collateral Highway helps cash givers and receivers mitigate counterparty risk by easily collateralising credit exposures with diversified pools of securities on a segregated basis."
"We are delighted to work closely with Newedge and MTS as a post-trade provider for the ACM market. We are well equipped to work with even more counterparties, including non-bank institutions, to bring additional and welcome liquidity to the European repo markets.”
Jack Jeffery, CEO of MTS, added: “The ACM platform was launched in response to demand from customers for secured money market investments and the transparency offered by electronic trading. We recognise the sophistication and appeal of Euroclear’s Collateral Highway and the advantages it will bring to our present and future participants.”
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