Greek government bond repo trading is being moved by MTS from EuroMTS to MTS Italy, the Italian regulated bond market that doubles as the holding company for the entire MTS Group.
The shift is part of a strategy adopted by the MTS Group a year or more ago, by which it aims to concentrate all repo trading activity on its platforms within MTS Italy.
Though MTS Italy trades only Italian Government bonds in the cash market, its repo platform already accommodates German, Dutch, Austrian, Irish, Portuguese, and French securities, plus some quasi-state and agency securities.
“From a trading point of view there is no impact for clients given that the repo platform is unique,” explains a spokesman for Eurobank EFG in Athens. “The only difference is the company under whose governance trading is executed. Participants will have to be members of MTS Italy in order to be able to trade Greek repos.”
Members will continue to settle trades via a local custodian. “Participants might have to sign with the relevant custodian a contract similar to the direct/indirect agreement already signed for EuroMTS,” says the Eurobank EFG spokesman. “MTS Italy is currently verifying with its lawyers if it would be sufficient to have a side letter extending to MTS Italy the validity of the EuroMTS direct/indirect agreement that clients have already in place or if it will be necessary for the clients and the local custodians to sign an MTS Italy contract, which would be almost identical to the EuroMTS one.”
The spokesman adds that there will be no change in settlement arrangements, with MTS Italy continuing to send SWIFT messages to the Bank of Greece. “The central bank has also confirmed that sequence number assigned to each account will not restart from scratch but will continue progressively starting from the last EuroMTS counter,” adds the EFG Eurobank spokesman.