BNP Paribas has announced it is first to provide third party clearing of bonds in France, Spain and Italy. The move presents an alternative to market participants wanting to clear fixed income products in those markets which previously had required CCP membership.
"In extending its global clearing membership of LCH.Clearnet and Cassa di Compensazione e Garanzia (CC&G) to cover fixed income, BNP Paribas now offers market participants a complete set of solutions to optimise their post-trade processes and liquidity requirements," writes BNP Paribas.
By outsourcing their clearing operations, market participants benefit from a reduction in flow complexity and the flexibility to choose a business model that is most appropriate for their requirements.
“Fixed income is beginning to get back some of its lustre and increasing numbers of clients are turning towards clearing flows to reduce counterparty risk, as opposed to settling trades bilaterally,” said Philippe Ruault, head of clearing, settlement and custody products at BNP Paribas Securities Services.
He adds that, last year, the nominal value of European government bonds and repo trades cleared by LCH.Clearnet increased by some 30 per cent, and expects that number to get bigger by the end of this year.
BNP Paribas expects to extend its memberships onto other CCPs to support increasing client demand and volume growth.
