Euroclear Bank and BNP Paribas Securities Services announce partnership on triparty collateral management
The agreement will enable the two organisations' mutual clients to use fixed-income and equity assets held with BNP Paribas Securities Services as collateral in triparty managed transactions at Euroclear Bank.
Client securities to be used as collateral will flow freely between the two organisations, while BNP Paribas Securities Services always remains the local custodian of the assets. When client securities are no longer needed as collateral by Euroclear Bank, they will be reinstated into the main client account held at BNP Paribas Securities Services.
The initiative consists of a multi-market collateral programme to be rolled-out in the next few months, delivering much-needed collateral flexibility and optimisation.
Frederic Hannequart, Chairman of Euroclear Bank, said: "Together, BNP Paribas and Euroclear Bank will help our clients achieve greater risk protection and smarter use of their assets as collateral. This is particularly important as demand for collateral increases. By joining forces, we will alleviate one of the challenges of collateral fragmentation by making the transfer of collateral to the right place at the right time as seamless and operationally simple as possible. We are delighted to be partnering with BNP Paribas in this regard."
Alain Pochet, Head of Clearing, Settlement and Custody at BNP Paribas Securities Services, said: "This type of partnership is key for both organisations. It will offer even greater optimisation of collateral to our mutual clients by accessing the Euroclear Bank triparty platform - in addition to BNP Paribas' in-house collateral management offer."
Euroclear UK & Ireland
Euroclear Bank is the world's largest international central securities depository, providing cross-border settlement and related services for transactions involving domestic and international bonds, equities, investment funds and derivatives. It services the post-trade needs of clients based in more than 90 countries, covering more than 600,000 different securities. It is a market leader in triparty collateral management.
Euroclear Bank is part of the user-owned and user-governed Euroclear group, which includes Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. Euroclear also owns Xtrakter, operator of the TRAX trade matching and reporting system.
In 2011, the Euroclear group settled the equivalent of more than EUR 580 trillion in securities transactions, representing 163 million domestic and cross-border transactions, and held more than EUR 22 trillion in assets for clients. The Euroclear group managed more than EUR 500 billion of collateral transactions per day in 2011. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor's.