Clearstream Further Standardizes Repo Agreements

Clearstream has developed a new master agreement that can be used by its clients to apply to any number of counterparties.

Participants of the agreement, which is a master agreement governed by Luxembourg law, will sign just one contract for multiple counterparties and speed up counterparty “marriage broking”.

The Clearstream Repurchase Conditions (CRC) contains most of the core provisions of current industry standardized repo agreements. It will offer repo participants the possibility of effectively testing their commercial appetite with regard to numbers of trades and volumes with a counterparty before choosing to carry out the extra effort necessary to enter into other bilateral repurchase agreements.

The CRC is available to customers on both the buy and sell-sides, notably corporates entering into reverse repos to secure their financing and then re-use the collateral they receive to cover OTC derivative margin requirements with clearing members or CCPs. Earlier this year, Clearstream announced strategic partnerships with the electronic trading platform 360T, serving a wide – mainly corporate – customer base, and with Bloomberg, automating the affirmation and processing of triparty repo transactions via Bloomberg terminals.

The CRC is an innovative master agreement that is helping to attract new players into experiencing the security benefits of the triparty repo market, according to Stefan Lepp, Head of Global Securities Financing at Clearstream. “We have seen clients give up on entering the repo market because they were waiting too long to negotiate bilateral agreements with each of their potential counterparties,” he said. “So we developed the CRC to deliver a pioneering, refined and simplified contract that offers a workable framework to satisfy the growing marked demand that goes hand-in-hand with new market segments entering the repo space.”