Clearstream is to settle Brazilian Real within the next month, weeks after announcing its ability to clear and settle asset classes denominated in Chinese Renminbi. Settlement for Indian Rupee will be launched by an estimated mid-2011.
The missing pieces have been Brazil and India, says Mark Gem, head of business management and a member of Clearstream’s executive board. We see this as appealing particularly for retail and transaction banks that really are looking to use people like us for a single global window.
Gem also pointed towards private client brokers on the German exchanges who are very keen to bring in Brazilian products. Clearstream joined forces with regional powerhouse Banc Itau to offer Brazilian clearing services.
Clearstream has placed significant importance on the Brazilian market during 2010. In June Clearstream and CETIP, the Brazilian CSD which operates the marketplace for fixed income securities and over-the-counter derivatives in Latin America, signed an agreement to jointly develop, promote and distribute triparty collateral management services.
Clearstream is also setting up a settlement service offering for Indian Rupees, with the primary demand coming from foreign investors in the Asia Pacific region. It is South-East and South Asian region flows that are interested in using us, and universal retail banks says Gem.
Despite the hyperbole from European banks looking to invest into Asia, Gem does not see this interest manifesting itself into India. The continental transaction banks and private banks who have expressed a strong interest in Brazil have been more silent over India.
However Gem admits that the Indian market is challenging and that Clearstream is at an early stage of the lifecycle in setting up settlement services.
The State Bank of India recently issued a road-map to opening up the securities market and deconstructing some of the more arcane rules that plague the Indian securities industry.
In mid-September Clearstream announced that it was able to clear and settle asset classes denominated in Chinese Renminbi.
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