For the first time in the Collateral Management sector, Clearstream is launching a 'Collateral Re-use Service'.
The new service will enable collateral receivers to re-allocate collateral as a guarantee from a triparty counterpart towards another triparty exposure, this time as a collateral giver.
This new functionality will be introduced mid October. It will remove a key limitation to the growth of the European market share of triparty repo in that it will make more collateral available.
There will be no limitations to participation with no restrictions on eligibility profiles, making it the first fully automated cross-quality and cross-product collateral "re-use" functionality offered by a triparty collateral agent.
This functionality will be possible across all Collateral Management Services where Clearstream acts as triparty agent including Triparty Repo, Triparty Securities Lending and any other exposure covered by more generic Triparty Collateral Management agreements. This new functionality is one in a series of product and service improvements to Cleastream's Triparty Collateral Management suite.
The European repurchase agreement (repo) market is one of Europe's premier financing tool for both banks and broker dealers with a size of over € 5.8 trillion in March 2006 according to the International Capital Markets Association (ICMA).
Clearstream pioneered the development of collateral management services, including triparty repo, in Europe by launching the world's first such multi-currency service back in 1993 and is now a key part of the infrastructure for the settlement and collateralization of repo and securities lending trades.
Clearstream's Global Securities Financing services, which include triparty repo, collateral management and securities lending, collectively experienced a rise of 33.6 percent for the first half of 2006 compared to the same period last year.