A collateral management service developed for customers of both Clearstream and BNP Paribas Securities Services has now launched across multiple markets and for both fixed income and equities.
The live service enables mutual customers to use Clearstream’s global collateral allocation, optimisation and exposure coverage while BNP Paribas Securities Services remains the local custodian, managing local settlement and asset servicing for its clients.
The assets used for triparty purposes are moved automatically into a Clearstream account in BNP Paribas Securities Services books, avoiding current manual cross-border processes for the clients. The first trade to go live in this cooperation involved Belgian, Italian, French and Dutch equities and also French and Dutch fixed income.
The partnership ensures customers of both institutions make optimal use of their asset pool in BNP Paribas Securities Services to use in tri-party transactions managed by Clearstream within its Global Liquidity Hub. Increased efficiency in collateral management is a growing industry priority in the light of the upcoming regulatory changes requiring greater collateralisation of exposures.
Alain Pochet, head of clearing, settlement and custody at BNP Paribas Securities Services, says: “We are pleased to offer the benefits of our partnership with Clearstream to our clients. This first step – related to fixed income and equities in Belgium, France, Italy and Netherlands – will soon be extended to other markets depending on our client’s priorities. This successful cooperation is essential in a strong regulatory context where our clients need to use their collateral assets wherever they are held with BNP Paribas Securities Services. Transparency and automation are the key words of this riskless solution, bringing a reduction of operation workload to our clients, allowing them to finance assets they would not have used before.”
Stefan Lepp, head of global securities financing at Clearstream, says: “We’re delighted that the efficiency of this service – part of our Liquidity Hub Connect stream delivering collateral management services for agent banks – is now proven while being flexible enough to cover a number of markets and asset classes. This development with BNP Paribas Securities Services is another great example of how our Global Liquidity Hub – a multi-layered, open architecture collateral management environment – is continuing to expand in scope. Growing through smart partnerships is part of our company DNA and we are pleased to have BNP Paribas as a key market partner.”