Clearstream and Lombard Risk enhance triparty connectivity
05 June 2018 Luxembourg
Image: Shutterstock
Lombard Risk has partnered with Clearstream to enhance triparty connectivity ahead of the regulatory deadline for initial margin requirements Phase 3, under the European Market Infrastructure Regulation (EMIR).
With this partnership Lombard Risk’s collateral management clients will gain access to Clearstream’s triparty collateral management services in order to improve liquidity on a global basis.
According to Lombard Risk, this will further improve collateral efficiency, enabling a straight-through collateral management process across all asset classes, promoting data accuracy and increasing visibility of the collateral management lifecycle on a global basis.
The new triparty connection will also allow joint customers of Clearstream and Lombard Risk to leverage their triparty collateral management activities in regards to repo, securities lending and borrowing and access to central bank money collateralisation at a Eurosystem level.
EMIR aims to increase transparency in exchange trading and reduce systemic counterparty as well as operational risk within the international financial system.
The new legislation requests all standardised derivatives contracts to be cleared through central counterparties. In addition, large parts of over-the-counter trading will have to be settled on a collateralised basis and reported to central trade repositories.
The next phase of margin requirements will require counterparties to exchange two-way initial margin on a non-netted basis for uncleared derivatives exceeding €1.5 trillion.
According to Lombard Risk, this puts additional pressure on tier 2/3 size firms to get their collateral management solutions in place. The necessary collateral must be segregated at a non-affiliated third-party custodian or triparty agent, such as Clearstream.
Helen Nicol, global product director of collateral solutions at Lombard Risk, said: “This new triparty connection enriches connectivity through our flagship collateral management solution, Colline, and will enhance our clients’ experience and choice.”
She added: “Clearstream is a leader in this field and enables our customers to further increase their collateral efficiency and accuracy through real-time atraight throught processing (STP) connectivity.”
Jean-Robert Wilkin, head of market development, global funding and financing at Clearstream, commented: “We always strive to further increase collateral efficiency in the market.”
He added: “This partnership allows our sell and buy-side clients to benefit from simplified access to an STP collateral management process and to leverage a single collateral pool, while re-using netting opportunities across both cleared and uncleared segments across multiple jurisdictions.”
With this partnership Lombard Risk’s collateral management clients will gain access to Clearstream’s triparty collateral management services in order to improve liquidity on a global basis.
According to Lombard Risk, this will further improve collateral efficiency, enabling a straight-through collateral management process across all asset classes, promoting data accuracy and increasing visibility of the collateral management lifecycle on a global basis.
The new triparty connection will also allow joint customers of Clearstream and Lombard Risk to leverage their triparty collateral management activities in regards to repo, securities lending and borrowing and access to central bank money collateralisation at a Eurosystem level.
EMIR aims to increase transparency in exchange trading and reduce systemic counterparty as well as operational risk within the international financial system.
The new legislation requests all standardised derivatives contracts to be cleared through central counterparties. In addition, large parts of over-the-counter trading will have to be settled on a collateralised basis and reported to central trade repositories.
The next phase of margin requirements will require counterparties to exchange two-way initial margin on a non-netted basis for uncleared derivatives exceeding €1.5 trillion.
According to Lombard Risk, this puts additional pressure on tier 2/3 size firms to get their collateral management solutions in place. The necessary collateral must be segregated at a non-affiliated third-party custodian or triparty agent, such as Clearstream.
Helen Nicol, global product director of collateral solutions at Lombard Risk, said: “This new triparty connection enriches connectivity through our flagship collateral management solution, Colline, and will enhance our clients’ experience and choice.”
She added: “Clearstream is a leader in this field and enables our customers to further increase their collateral efficiency and accuracy through real-time atraight throught processing (STP) connectivity.”
Jean-Robert Wilkin, head of market development, global funding and financing at Clearstream, commented: “We always strive to further increase collateral efficiency in the market.”
He added: “This partnership allows our sell and buy-side clients to benefit from simplified access to an STP collateral management process and to leverage a single collateral pool, while re-using netting opportunities across both cleared and uncleared segments across multiple jurisdictions.”
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