BNP Paribas and Euroclear Extend Joint Tri-Party Collateral Management Service

BNP Paribas Securities Services and Euroclear Bank, the international central securities depository, have extended their joint tri-party collateral management service to include four new markets: Belgium, France, Germany and the Netherlands.

The service was introduced in Italy and Spain last year and is used by investment banks and brokers. The partnership enables these mutual sell-side clients to optimize equities and fixed-income securities collateral held in both companies’ books in these six domestic markets for use in tri-party transactions managed by Euroclear Bank. The securities can be returned to clients’ domestic accounts as and when required.

Frederic Hannequart, chairman of Euroclear Bank, says: “Our partnership with BNP Paribas, which now spans six European capital markets, is part of the on-going extension of the Collateral Highway to more markets globally. Our joint customers can now take a holistic approach to collateral management and this service affords them the highest levels of cost and risk efficiencies when sourcing and allocating securities. Together with BNP Paribas, we are delivering a client-driven solution that hinges on open-source portfolio optimization.”

Alain Pochet, head of Clearing, Custody and Settlement at BNP Paribas Securities Services, says: “Our Collateral Access – Connect service, which enables us to establish links with institutions such as Euroclear Bank while keeping our clients’ assets segregated, is an excellent example of how the industry can work together to help customers access collateral easily and efficiently.”