Thursday July 18 2013
News Source: Global Exchanges
Focus: Trading Systems and Technology
Type: General
The ICMA European Repo Council has today signed a Memorandum of Understanding with Clearstream, Euroclear and Eurex Clearing, which engages the three post-trade infrastructure providers in a joint project enabling their systems to work together to increase the efficiency of the repo market . The project primarily creates the opportunity for Eurex Clearing to extend the connected settlement locations for its secured funding market GC Pooling with Clearstream Banking to include Euroclear Bank. Pending completion of detailed feasibility studies and market consultation, triparty settlement interoperability is envisaged to be delivered by the end of 2015.
Establishing triparty settlement interoperability with both triparty service providers will improve the movement of collateral between the connected settlement locations in Europe. It will also reduce collateral pool fragmentation, which currently can cause technical fails, while allowing banks to supply liquidity to the real economy through the intervention of the repo markets. The initiative will increase the efficiency of collateral management for repo basket trading throughout Europe and will boost the fluidity of collateral across the Euro zone.
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