30 September 2014
Reporter: Stephen Durham

DTCC and Euroclear in joint venture

The Depository Trust & Clearing Corporation (DTCC) and Euroclear are to enter into a joint venture focusing on collateral processing.

The newly-created company, DTCC-Euroclear Global Collateral, will be domiciled in the UK and its operations are subject to regulatory approvals.

Ownership and governance of the joint venture company will be shared equally between DTCC and Euroclear with its board and senior executives drawn from the two firms’ management.

Michael Shipton, Euroclear managing director and head of corporate technology, will assume the role of CEO and Mark Jennis, DTCC’s managing director of strategy and business development, will assume the role of executive chairman.

In addition to Shipton and Jennis, the joint venture’s board will include Euroclear’s Jo Van de Velde and Mei Li Powell, along with DTCC’s Peter Axilrod and Andrew Douglas.

The joint venture will bring to market a Margin Transit Utility (MTU) and Collateral Management Utility (CMU).

The MTU will provide straight-through processing of margin obligation settlement, using current DTCC infrastructure, as well as additional infrastructure currently in development in coordination with the industry.

Industry testing of the MTU is scheduled to begin in mid-2015.

The CMU will address sub-optimal collateral allocation and mobility, through utilising Euroclear’s Collateral Highway, and will follow the launch of the MTU.

The joint venture will operate open architecture services thereby facilitating access to other central securities depositories, custodians and settlement agents.

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