Euroclear Bank and Standard Chartered broaden collateral pool
Brussels and Hong Kong, 25 April 2013 – Euroclear Bank announces today that assets for mutual clients held at Standard Chartered will now be available for use as collateral - via Euroclear’s global “Collateral Highway” - to meet collateral requirements in triparty deals managed by Euroclear Bank.
Standard Chartered is the first Asia-based agent bank to join the Collateral Highway. As a result, all equity and fixed-income securities held within the Standard Chartered custody network can potentially become eligible assets to be used as collateral when Euroclear Bank serves as the triparty agent. As a result, clients will be able to broaden the pools of collateral available to secure exposures arising from various types of transactions, while enjoying greater interoperability and choice as to how they can finance their assets. Standard Chartered will continue to hold the assets as custodian while the securities move across markets and time zones via Euroclear’s Collateral Highway. These assets may be transported as collateral to cover exposures arising from, for example, repos, loans, derivatives and CCP margins, as well as for access to central bank liquidity.
Olivier Grimonpont, General Manager and Region Head, Asia-Pacific, of Euroclear Bank, said: “The agreement with Standard Chartered to make assets in their network available to the Collateral Highway will ease cross-border financing. Euroclear Bank is active in collateralising many types of transactions, including cross-border RMB repo deals. Access to assets held by Standard Chartered to collateralise these transactions will open the market even further. We are delighted to be partnering with Standard Chartered to add a triparty dimension to their collateral management service offering and to offer even deeper pools of liquidity to our mutual clients.”
Alan Naughton, Global Product Head of Investors and Intermediaries, Transaction Banking, Standard Chartered, commented: “Today’s partnership positions us as the first bank in Asia to offer mutual clients of Standard Chartered and Euroclear Bank the opportunity to mobilise their securities inventory through the collateralising of global exposures from a single collateral pool. This collaboration demonstrates our client-centric strategy, where we address our clients’ challenges of collateral scarcity and fragmentation when operating across our footprint markets of Asia, Africa and the Middle East.”
Euroclear’s global Collateral Highway is responsible for sourcing and mobilising more than EUR 700 billion of collateral everyday. The Collateral Highway is the first fully open global market infrastructure and is not part of any trading-clearing-settlement silo. In fact, it is designed to break down silos to free up locked collateral. Collateral Highway entry points are where collateral is sourced from all Euroclear central securities depositories (CSDs), agent banks like Standard Chartered, clearers and CSDs located in any time zone. The securities are transported to where they are needed as collateral, for example to CCPs, central banks and securities financing counterparties. Custodians, agent banks and CSDs without a collateral management service offering will be able to use the Collateral Highway as their own for their domestic clients.
Note to Editors
Euroclear is the world’s largest provider of domestic and cross-border settlement and related services for bond, equity, derivatives and fund transactions. The Euroclear group includes Euroclear Bank, based in Brussels, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland.
In 2012, the Euroclear group settled the equivalent of EUR 542 trillion in securities transactions, representing 159 million domestic and cross-border transactions, and held more than EUR 23 trillion in assets for clients. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.
For additional information, please visit: www.euroclear.com.