Regulation Drives Volumes On Clearstream In September

Preparations for incoming rules sparked an increase in transactions settled and assets held under custody by Clearsteam, as regulatory readiness is now becoming a major priority according to a Clearstream executive.

Assets under custody increased 5% to around €12.3 trillion in comparison to the same month last year at the Deutsche-Boerse owned firm, while international settlement transactions processed also increased 13% to 3.6m.

Securities held under custody in Clearstream’s international central securities depository (ICSD) increased 7% to €6.6 trillion, and securities held in its German CSD also increased 3% to €5.7 trillion.

The majority of transactions settled by Clearstream were over-the-counter (OTC), making up 84% of all transactions while 16% were registered as stock exchange transactions.

In addition its global securities financing services, which includes tri-party repo, securities lending and collateral management, collectively increased 10% over the month to reach €632.2 billion.

“Various regulations are about to enter into force over the coming months and all market participants are now entering an intense preparatory phase during which they will have to make some significant investment decisions,” says Philip Brown, head of global client relations, Clearstream.

With increased margin and clearing requirements set out in the European Markets Infrastructure Regime (EMIR), collateral mobilisation has become a key priority for firms in order to meet the new rules.

Furthermore with the migration of securities settlements to T+2, firms are increasingly turning to settlement and clearing providers in order to carry on doing business.

In order to meet this demand, Euroclear and the Depository Trust and Clearing Corporation (DTCC) launched a joint venture last month aimed to process collateral and facilitate access to other CSD’s, custodians and settlement agents.

Brown adds projects which address these market challenges are underway at Clearstream, and is on track with the migration to TARGET2Securities (T2S).

“The fact that our clients continue to entrust us with a greater proportion of their business, as evidenced by our growing volumes across the board, is a great vote of confidence… and encourages us to continue to deliver those solutions that clients tell us they need.”