BNP Paribas Securities Services has extended its European clearing capabilities to provide third-party clearing of bonds in France, Spain and Italy.
Previously, market participants wanting to clear fixed-income products in those markets would have been required to become direct members of a central counterparty (CCP).
In extending its global clearing membership of LCH.Clearnet SA and CC&G to cover fixed income, BNP Paribas offers a suite of software that aids in post-trade processes and liquidity requirements.
Fixed income is beginning to get back some of its luster and increasing numbers of clients are turning towards clearing flows to reduce counterparty risk, as opposed to settling trades bilaterally, says Philippe Ruault, head of clearing, settlement and custody products at BNP Paribas Securities Services.
In parallel, ongoing legislation such as EMIR and Dodd Frank continues to push more instruments onto standardized clearing infrastructures. The combination of these factors is contributing to a real surge in demand, Ruault adds. Last year, the nominal value of European government bonds and repo trades cleared by LCH.Clearnet increased by around 30%, and we expect that number to increase further come the end of 2011.
The bank also expects to extend its memberships onto other CCPs to support increasing client demand and volume growth.
(CM)