Clearstream and ASX have entered in exclusive negotiations to jointly develop a new collateral management offering for the Australian market.
The collateral management service for Australia will target the collateralization of exposures in the Australian market managed via ASX. The service will enable ASX clients to handle their collateral holdings and exposures more efficiently, thus strengthening their risk profiles across their trading activities. ASX envisages outsourcing the allocation, optimization and substitution of local collateralheld in the central securities depository Austraclear and CHESS, the settlement system for equities tradesto Clearstreams proven collateral management infrastructure, the Global Liqudity Hub, that operates on a fully-automated basis and in real time.
Our collateral management service addresses the major industry concern to consolidate and streamline collateral management activities, Jeffrey Tessler, CEO of Clearstream, says. All users will immediately benefit from future system enhancements in line with market requirements and regulatory demand. We are delighted to partner with ASX, a cooperation that confirms the validity of our collateral management outsourcing model. We will continue to grow this model with a strong partnership approach that incorporates the needs of our strategic partners and their underlying customer base.
Peter Hiom, deputy CEO of ASX, adds: ASX is working to expand the range of its post-trade services in the Australian market to meet the rapidly changing needs of financial market participants. The large amount of collateral held in ASX depositories presents an opportunity for us to deliver a domestically operated, centralized and fully-automated collateral management service. This will allow ASX customers to directly use securities held in CHESS and Austraclear to manage their exposures and to facilitate the funding of their market activity. It will also deliver cost and operational benefits to our customers. As a world leader in the development of collateral management services, Clearstream is a natural partner to assist ASX in bringing this vision to fruition.
(CM)