PGGM to centrally clear repos at Eurex
22 January 2019 Amsterdam
Image: Shutterstock
PGGM is to centrally clear repos at Eurex, the first pension fund manager to do so, using Eurex’s ISA Direct service.
The initiative means PGGM`s clients can now trade with more than 140 Eurex participants including commercial banks, central banks, government financing agencies or supranational, using ISA Direct.
PGGM clients will also be able to invest cash securely or raise short-term funding reliably utilising international securities identification numbers.
With this direct clearing connection, Eurex addresses repo market liquidity concerns as well as the regulatory-driven challenges of asset owners, in particular, pension funds.
The ISA Direct Service also meets European Markets Infrastructure Regulation requirements in which all over-the-counter derivatives are to be cleared through central clearing counterparties.
Though pension funds have been exempted as the requirement of central counterparties to post variation margin in cash might pose liquidity challenges.
PGGM utilises SimCorp Dimension to process all Eurex repo trades and support the margin process.
Eurex Clearing`s ISA Direct Model is currently offered for repos as well as over-the-counter interest rate swaps (IRSs).
Paul van de Moosdijk, investment manager at PGGM: “PGGM continues to voice concerns about the adverse effect that cash variation margin requirement has on pension funds.”
He added: “Through Eurex Repo’s offering PGGM is enhancing its access to cash liquidity and market infrastructure to further address these concerns.”
Frederic Colette, global head of prime brokerage and clearing: “We believe that the central clearing of repos via ISA Direct is very compelling for both the buy side as well as Societe Generale as the clearing agent and execution counterpart.”
He added: “It allows our clients to get a direct connection to the cleared repo market on Eurex for the first time, securing access to a large liquidity pool through a streamlined process at a very competitive price.”
Matthias Graulich, global head of fixed income, funding and financing strategy and development at Deutsche Börse Group: “The successful onboarding of PGGM validates our efforts to open up the centrally cleared repo market to the buy side.”
He added: “We anticipate that other pension funds and buy-side entities with large directional derivatives portfolios will appreciate the significant benefits of combining centrally cleared repos with OTC IRS under ISA Direct in the near future.”
The initiative means PGGM`s clients can now trade with more than 140 Eurex participants including commercial banks, central banks, government financing agencies or supranational, using ISA Direct.
PGGM clients will also be able to invest cash securely or raise short-term funding reliably utilising international securities identification numbers.
With this direct clearing connection, Eurex addresses repo market liquidity concerns as well as the regulatory-driven challenges of asset owners, in particular, pension funds.
The ISA Direct Service also meets European Markets Infrastructure Regulation requirements in which all over-the-counter derivatives are to be cleared through central clearing counterparties.
Though pension funds have been exempted as the requirement of central counterparties to post variation margin in cash might pose liquidity challenges.
PGGM utilises SimCorp Dimension to process all Eurex repo trades and support the margin process.
Eurex Clearing`s ISA Direct Model is currently offered for repos as well as over-the-counter interest rate swaps (IRSs).
Paul van de Moosdijk, investment manager at PGGM: “PGGM continues to voice concerns about the adverse effect that cash variation margin requirement has on pension funds.”
He added: “Through Eurex Repo’s offering PGGM is enhancing its access to cash liquidity and market infrastructure to further address these concerns.”
Frederic Colette, global head of prime brokerage and clearing: “We believe that the central clearing of repos via ISA Direct is very compelling for both the buy side as well as Societe Generale as the clearing agent and execution counterpart.”
He added: “It allows our clients to get a direct connection to the cleared repo market on Eurex for the first time, securing access to a large liquidity pool through a streamlined process at a very competitive price.”
Matthias Graulich, global head of fixed income, funding and financing strategy and development at Deutsche Börse Group: “The successful onboarding of PGGM validates our efforts to open up the centrally cleared repo market to the buy side.”
He added: “We anticipate that other pension funds and buy-side entities with large directional derivatives portfolios will appreciate the significant benefits of combining centrally cleared repos with OTC IRS under ISA Direct in the near future.”
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