Seoul
23 November 2012
Reporter: Jenna Jones
Securities Lending default image
Euroclear widens Collateral Highway
In a continued effort to create the first fully open global market infrastructure to source and mobilise collateral across geographic borders, Euroclear Bank’s ‘Collateral Highway’ has expanded into South Korea.

Euroclear Bank has signed a Memorandum of Understanding with the Korea Securities Depository (KSD) “to usher in the wider use of Euroclear Bank-eligible securities as collateral by international counterparties when securing collateralised transactions with local Korean investment counterparties,” said a statement from Euroclear.

The Collateral Highway is expected to be useful to South Korea in two specific collateral management domains—secured loans and derivatives contracts—which up until now have been reliant on cash and South Korean securities that are posted as collateral.

“Upon the launch of the service, [South] Korean entities will be able to secure securities lending and derivatives transactions using a possible range of over 600,000 securities eligible at Euroclear Bank—naturally subject to the prearranged eligibility requirements which both trading parties have agreed to,” added Euroclear.

Euroclear Bank expects the Collateral Highway to go live in South Korea no later than June 2013.

Olivier Grimonpont, Euroclear general manager and regional head for Asia Pacific, said: “The agreement with KSD reinforces our commitment to the Asia-Pacific region and builds on many initiatives which we have started. In recent times, we have worked closely with our partners KSD to help them launch an off-shore [South] Korean funds platform using Euroclear Bank’s investment fund processing technology.”

“Beyond [South] Korea we are crystalising our mission of ‘post-trade made easy’ by cooperating with the likes of the Hong Kong Monetary Authority to strengthen cross-border access to liquidity and with Bank Negara Malaysia to extend the attractiveness of Asian bond markets to foreign investors.”

Kyung Dong Kim, chairman and CEO of KSD, said: “As the sole CSD in the nation, my organisation oversees the issuance and circulation of 2,500 trillion worth of [South] Korean won securities.”

“In an ever expanding global market space, it is only normal that our local clients look at bigger and better ways to attract trading counterparties from within the region, Europe and the Americas. This MoU with Euroclear Bank unlocks the door to wider cross-border business flows with their 1400 clients based in over 90 countries.”

Euroclear’s Collateral Highway went live earlier this year, with the Hong Kong Monetary Authority’s Central Money Markets Unit and BNP Paribas Securities Services among the first to sign up.

More news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
BNP Paribas: ESG investment seeing increased interest
25 May 2017 | London | Reporter: Stephanie Palmer
The survey report noted that 77 percent of asset owners already incorporate ESG aspects into their strategies
Nasdaq to support Chilean CSD in post-trade tech
25 May 2017 | Santiago | Reporter: Stephanie Palmer
Based on the Nasdaq Financial Framework the solution will replace Depósito Central de Valores’s existing core system
Funds need to keep an eye on BEPS negotiations
24 May 2017 | London | Reporter: Becky Butcher
Fund participants were encouraged at Guernsey’s Fund Forum to pay close attention to negotiations over base erosion and profit sharing (BEPS) rules
Northern Trust expands UAE operations
24 May 2017 | Abu Dhabi | Reporter: Stephanie Palmer
Northern Trust has opened a new branch office in Abu Dhabi, as part of a continuing focus on business in the UAE
R3 raises record funds for DLT development
24 May 2017 | London | Reporter: Stephanie Palmer
The R3 group has raised $107 million in two tranches of fundraising, securing the largest ever investment in distributed ledger technology to date
Promotions abound at Interstrust in Jersey
24 May 2017 | Jersey | Reporter: Stephanie Palmer
Intertrust in Jersey has made a spate of promotions, including elevating Sherin Sugeeswaran to the role of associate director in the fund services team
RSRCHXchange boosts research offering with data consumption partnership
23 May 2017 | London | Reporter: Stephanie Palmer
Institutional research marketplace RSRCHXchange has partnered with corporate access management solution provider CorpAxe in order to make research consumption data available to the buy side
More news