Clearstream launches OneClearstream collateral management service
Clearstream’s new service enabling mutual customers of Clearstream Banking Luxembourg and Clearstream Banking Frankfurt to automatically mobilise assets across both ICSD and CSD for triparty collateral management is now live.
Clearstream has successfully conducted the first collateral allocations on behalf of DZ Bank AG using our new OneClearstream collateral management service (OneCMS). OneCMS, which forms part of Clearstream’s enhanced integrated offering for TARGET2-Securities (T2S), enables full triparty interoperability between Clearstream’s CSD and ICSD. A single collateral management system manages customers’ entire collateral pool across different locations, resulting in an optimised use of collateral and enhanced liquidity management.
Olivier Deutscher, Head of Short Term Liquidity, Repo and Collateral Trading/Group Treasury from DZ Bank AG commented: “We are pleased that Clearstream has implemented a single collateral management service enabling full interoperability between Clearstream’s CSD and ICSD. This new model will improve our management of liquidity and collateral, therefore helping to further unlock numerous operational efficiency gains.”
Fabrice Tomenko, Co-Head of GFF Business & Product Development at Clearstream Banking S.A. stated: "We are in close cooperation with our customers to develop innovative T2S-based solutions. Forming part of our enhanced integrated service offering, OneCMS shows that we are fully committed to helping our customers make the most of T2S."
Previously, customers were obliged to realign their assets from the CSD to the ICSD to use them as collateral; the new setup provides collateral management for both CSD and ICSD and automatically realigns assets between both locations when needed. This automation will boost customers’ operational and settlement efficiency and will help them to overcome collateral fragmentation.
Customers can already start benefiting from the interoperability between the CSD and the ICSD liquidity pools. During this first collateral allocation, assets were mobilised out of DZ Bank AG’s account at Clearstream Banking Frankfurt to use as collateral at the ICSD towards the Federal Reserve’s Discount Window.
This represents the first phase of what Clearstream wants to achieve with OneCMS, where assets held at CSD level can be automatically mobilised and serve the customer’s collateral management activity at the ICSD.
Clearstream will soon launch the second phase of OneCMS, where the CSD will offer “ICSD like” collateral management services settling in T2S, including a Euro tri-party repo service settling in Central Bank money. Similar to the first phase, the system will be able to automatically mobilise assets that are being held at the ICSD to serve the customer’s collateral management activity at the CSD enabling as such an enhanced and optimised reuse of collateral across locations.
From Q2 2018, Clearstream will start to roll out its T2S Investor CSD offering on a market-by-market basis. Users of the OneClearstream collateral management service will automatically benefit from each extension of the T2S market coverage of Clearstream’s CSD starting with ESES and Italy.