BNP Paribas Securities Services has launched a clearing, settlement and custody service for clients trading euro cash liquidity through €GCPlus, a centrally cleared triparty repo-secured financing market developed by Banque de France in collaboration with LCH.Clearnet SA and Euroclear.
The solution is designed to allow market participants to secure euro cash lending using standardised baskets of collateral. It can also allow clients to re-use collateral received with either the Bank of France or with any collateral takers.
The €GCPlus market can be used by asset managers, corporates, banks and other financial institutions, offering a new and easily accessible source of secured liquidity.
BNP Paribas will act as the sole general clearing member, handling the legal relationship with LCH.Clearnet and posting the required default fund contributions and pre-fund margin call payments required for clients.
Through the BNP Paribas clearing and settlement system, clients will also be able to avoid some of the implementation costs associated with new clearing regulations.
Jean-Marc Baudot, head of clearing, custody and settlement products for Belgium, France, the Netherlands and Portugal at BNP Paribas Securities Services, said: “Our clients are looking for ways to manage collateral efficiently, move it quickly and address their funding needs. €GCPlus is one of the products that help them do that.”
“Consequently, we have devised a range of services designed to handle the various operational processes linked to trading €GCPlus. This offer will complement our existing clearing, settlement, custody and financing solutions.”
Michael Carignano, head of fixed income at LCH.Clearnet, said: “An increasing number of market participants are looking to gain access to central clearing so they can benefit from greater operational and capital efficiencies. In 2015, we’ve seen a marked uptick in cleared volumes through €GCPlus.”
Cyril Louchtchay de Fleurian, Euroclear’s head of collateral management and securities financing products, added: “As a financial market infrastructure, Euroclear is dedicated to providing services that reduce risk and improve market efficiency.”
“Since launching €GCPlus in 2014, clients have benefitted from easy access to the triparty repo process, with a reduced operational burden. Offering €GCPlus through BNP Paribas Securities Services is another step in developing this market solution.”
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