The European Repo Committee (ERC) of the International Capital Markets Association has taken the long running complaint of its members about the difficulties of financing assets across the electronic bridge between Euroclear and Clearstream to a new level.
ERC chairman Godfried de Vidts has written to Joel Merere, the chairman of the European Central Securities Depositories Association (ECSDA) to which both ICSDs belong to say that “the committee considers it to be essential that the efforts to further improve the interoperability between the CSDs, custodian banks and the ICSDs be continued in order to facilitate and accelerate the settlement process for cross border/cross system securities. In particular with regard to the processing of settlement instructions across the bridge between both ICSDs an immediate acceleration of the process is required. “
The letter suggests that the deadlines for the input of bridge instructions for counterparties located in the ICSDs be extended from 13.30 CET to 17.30 CET. De Vidts says this extension will improve settlement efficiency across the bridge, and make it easier to re-deliver securities from local markets across the bridge during the trading day. He adds that users of both ICSDs will have more time to repair unmatched transactions, and recycle failed trades in the daytime cycle.