DBV-X, a new EU regulated marketplace for collateral and secured deposits, has announced it will go live in Europe later this year.
Focused solely on funding and collateral needs, DBV-X will offer market participants cost-efficient and rapid access to a diverse range of counterparties and high-quality liquid assets. All participants sign a single standard legal agreement to join the platform and have full control over the products and counterparties used, thereby enabling a peer-to-peer market to flourish.
The platform will offer full pre-trade counterparty anonymity, price transparency and a choice of execution models. Market participants are able to trade automatically within their risk limits to access a wide range of standardised liquid General Collateral (GC) “baskets”, encompassing a broad spectrum of eligible assets including government and corporate bonds. This enables customers to invest/raise cash against collateral (“repo”), perform collateral upgrades or generate additional yield according to their individual investment, funding and margin requirements.
DBV-X is free to join and is open to corporates, asset managers, pension funds, insurance companies, hedge funds, brokers, dealers and banks. Using standardised products and processes, these firms will have access to a range of maturities, currencies and collateral options, with a choice of Tri-Party or CCP cleared trades. It aims to go live in the last quarter of 2015.
DBV-X also announced that Euroclear has been appointed to act as the platform’s Tri-Party agent in Europe. DVB-X has adopted Euroclear’s RepoAccess GMRA based legal model, which makes counterparty diversification simple, fast and more efficient.
John Wilson, Managing Director, Tradition and Head of DBV-X, comments: “The current regulatory and economic environment is driving fundamental change in funding and collateral markets – OTC clearing, the impact of leverage ratios on repo activity by banks and LCR on short-term deposits – as well as a clear shift away from unsecured collateral to secured deposits. This is driving the need for all firms to re-assess their treasury strategies and consider diversifying their counterparties.
“We’re thrilled to be working with Euroclear on this initiative, which has been warmly received by market participants during an extensive market engagement process. By offering full STP from order to execution to settlement, same-day settlement is enabled through Euroclear’s market leading Collateral Highway.”
Jo Van de Velde, Managing Director and Head of Product Management at Euroclear, comments: “We would like to congratulate DBV-X on the launch of their electronic trading platform and are delighted that DBV-X have chosen Euroclear as the market’s tri-party agent. By connecting with Euroclear’s Collateral Highway, DBV-X’s clients will have fast, efficient and open access to a growing community of counterparties and an ever growing pool of collateral and deposits for trading, margin and funding requirements.”