TMX Group has announced that it will launch a new collateral management service for the Canadian market that is scheduled for Q3 2023.
The collateral solution, named the Canadian Collateral Management Service (CCMS), has been built through collaboration with Clearstream Banking SA, Clearstream’s ICSD and licensed banking arm based in Luxembourg.
TMX Group, which operates the Toronto Stock Exchange and key Canadian post-trade infrastructure including the Canadian Depository for Securities (CDS), has worked with Clearstream to bring together their collateral management and post-trade expertise, delivering improved optimisation and collateral mobilisation to the Canadian market and offering domestic triparty repo in this location for the first time.
The first phase of CCMS will offer collateral management benefits to participants in Canada’s secured funding market, delivering greater automation and processing efficiency across the SFT lifecycle.
TMX indicates that this will also set the Canadian market in a better position to move to T+1 settlement in May 2024, supporting greater collateral mobility at lower operational risk.
Commenting on the forthcoming CCMS release, TMX Group CEO John McKenzie says: “We are pleased to work together with Clearstream, a world-leader in post-trade infrastructure and securities services, in pursuit of a customised mobility and liquidity solution for Canada’s secured finance industry.
“In keeping with our purpose to make markets better and empower bold ideas, TMX is firmly committed to seeking out innovative, workable solutions to client challenges and strengthening Canada’s financial ecosystem.
“The new CCMS will enable our clients to better meet the continuously evolving collateral requirements of today’s markets, while supporting the growth of repos as an investment product for Canadian buy and sell side clients,” adds McKenzie.
Sam Riley, CEO of Clearstream Securities Services, comments: “It is at the heart of Clearstream’s collateral management strategy to provide our clients with reliable and scalable state-of-the-art solutions that reduce the frictional costs of trading through transparency and automation.
"In TMX, we have found an excellent partner to deliver our proven first-class triparty repo capability to the Canadian market. CCMS will deliver increased liquidity and efficiency while minimising exposures, supporting the Canadian market on its endeavour to move to T+1.
“Clients will also benefit from Clearstream’s industry-leading technology and digital innovation, such as the cloud-based, digital collateral schedule capability known as OSCAR.”
