CME Clearing Europe is to be the first external client of BNY Mellon CSD SA/NV, the company’s Belgium-based central securities depositary (CSD), with the first securities transaction settled in late August.
Article 47.3 of the European Market Infrastructure Regulation requires that margin collateral for a central counterparty (CCP) must be segregated and held by the operator of a recognised securities settlement system, such as BNY Mellon CSD.
Lee Betsill, CEO at CME Clearing Europe, said: “Our relationship with BNY Mellon CSD is important to us because it means that clients can benefit from an additional option in respect of CME Clearing Europe’s collateral protection models, which will in due course include our new fully segregated account structure.”
“This structure ensures that collateral held at a [CSD] is fully segregated at the individual client level, which provides an enhanced level of collateral protection for all scenarios in the event on bankruptcy.”
Chris Prior-Willeard, CEO of BNY Mellon CSD SA/NV, said: “Our appointment by CME Clearing Europe is a key milestone in the on going development of our CSD proposition and demonstrates the market recognises the value and innovation we bring to the post-trade infrastructure space.”
“We are committed to establishing further links to support CCPs in managing and accessing a wider range of collateral, as well as offering settlement for all market participants.”
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