The London-based central counterparty (CCP) ICE Clear Europe and the international central securities depository (ICSD) Clearstream Banking S.A. have launched a new collateral management partnership which enables clearing members to use their assets held at Clearstream to manage their margin requirements.
ICE Clear Europe offers its clearing members a triparty collateral management service by providing direct connectivity into Clearstream’s integrated collateral management engine, the Global Liquidity Hub. This link to the triparty collateral management solution of Clearstream enables ICE Clear Europe members to deposit and use securities as collateral to cover their risk exposures within a highly automated and efficient collateral environment.
The launch of this new service supports political moves to strengthen the stability of capital markets through an increased clearing of trades. The partnership between Clearstream and ICE Clear Europe helps to avoid bottlenecks in the sourcing of the right high-grade collateral to meet the CCP’s margin requirements. Collateral can be pooled at Clearstream’s Global Liquidity
Hub to make it available for meeting margin requirements via the secure, fully automated triparty collateral management service.
« ICE Clear Europe customers will now benefit from streamlined triparty collateral management through our Global Liquidity Hub,” said Stefan Lepp, Head of Global Securities Financing and Member of the Executive Board of Clearstream (photo). “This new partnership is part of our strategy of enabling customers to use the Global Liquidity Hub as a single source of liquidity
to collateralise multiple global exposures in a streamlined and optimised
manner. More importantly, users of the Global Liquidity Hub will be able to manage
all cleared activities from a single location. »
« ICE Clear Europe is committed to providing enhanced clearing services to help members comply with new regulatory requirements. Clearstream’s tri-party collateral solution provides ICE Clear Europe members with an additional and efficient way of meeting initial margin requirements, via one of the best linked collateral pools globally, » said Paul Swann, President, ICE Clear
Clearstream’s Global Liquidity Hub delivers integrated securities lending, borrowing and collateral management services in cash, fixed-income, equities and investment funds. The sophisticated system allows a high degree of flexibility enabling the broad range of participants to implement
individual service requirements. In February 2015, the monthly average outstanding reached EUR 629.5 billion.