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
Northern Trust has reported a 16 percent rise in assets under custody in Q2 2017.
Standard Chartered builds on securities services team
25 July 2017 | Singapore | Reporter: Jenna Lomax
Standard Chartered has appointed Ryan Cuthbertson as head of product management, custody and clearing, securities services and transaction banking
UniCredit embarks on test phase for European instant payments
25 July 2017 | Milan | Reporter: Stephanie Palmer
UniCredit has started testing EBA Clearing’s instant payment solution RT1, in preparation to roll out instant payments multinationally
Eagle Fund Accounting Solution to be used by Desjardins
24 July 2017 | | Reporter: Jenna Lomax
Desjardins Asset Management, part of Desjardins Group, previously signed with Eagle Accounting for its asset management in 2011
Clearstream gains Edmond de Rothschild as Vestima client
24 July 2017 | Switzerland | Reporter: Jenna Lomax
Vestima, Clearstream’s fund process programme, will assist Rothschild by processing its assets in its mutual funds and hedge funds on a single platform
Northern Trust to offer fund services to GuideStone Funds
24 July 2017 | Dallas | Reporter: Jenna Lomax
GuideStone Funds is a subsidiary of GuideStone Financial Resources, a financial service providing retirement, investment and life and health plans to evangelical Christian churches, educational institutions and ministry organisations
BNY Mellon recruits for alternative investment team
21 July 2017 | New York | Reporter: Jenna Lomax
BNY Mellon has made two senior appointments to its alternative investment services team
More news