Euroclear France, in collaboration with the Association Franaise des Professionnels des Titres (AFTI), has created a collateral fund worth more than Euros 430 million to secure against any default payments when settling French securities trades on its RELIT+ platform.
Euroclear says that the fund means RELIT + complies fully with the CPSS/IOSCO recommendation that requires central securities depositories operating a revocable net settlement system to implement risk controls that, at a minimum, ensure timely settlement in the event that the participant with the largest payment obligation is unable to settle. Euroclear France’s RGV2 settlement platform is an irrevocable system, which is already compliant with the CPSS/IOSCO recommendations.
The project was led by AFTI, with the co-operation of the Banque de France, Euroclear France, market participants and the Centrale des Rglements Interbancaires (CRI), the market infrastructure for cash payments and transfers in France.
“We applaud the market’s efforts to take the necessary measures, in the form of a collateral fund, to reduce a residual source of settlement risk,” says Vincent Gros, Deputy General Manager of Euroclear France. “Euroclear France’s technical and operational contribution to this project, together with the efforts of AFTI, the CRI and others, demonstrates how the market and the local market infrastructure can work together to achieve a common objective.”