TEB Securities Services, part of the TEB-BNP Paribas joint venture, has been appointed the account operator for Euroclear Bank’s new link to Turkey.
The new link, which went live last month, will enable international investors to hold and settle Turkish government debt securities through their existing Euroclear accounts.
As an account operator, TEB Securities Services will have the right to operate the omnibus account that Euroclear Bank opened under its newly-structured membership at MMK, Turkey’s local central securities depository (CSD), broadening their connectivity within the Euroclear ecosystem.
“This new link represents another important step in the development of the Turkish capital markets, making it easier for international clients to invest in the government debt securities markets,” said Ertunc Gurson, head of TEB Securities Services. “Foreign investors will benefit from a global product offering which will bring Turkish government bonds in line with other mature markets.”
The deal with Turkey’s Ministry of Finance concluded a multi-year journey for the country to establish the appropriate market conditions to achieve ‘Euroclearability’.
According to a PwC study released last year, for countries that have recently obtained Euroclearability, the potential gain from lowering borrowing costs is associated with a GDP boost of $3.8 billion over 10 years.
The benefits of the international system include foreign investors accessing the local market in a more secure and standardised way, local issuers have enhanced access to wider liquidity pools and can realise a potential reduction in the overall volatility of borrowing costs.
“Investing in domestic capital markets require simplicity, cost-effectiveness and risk minimisation. We are pleased, together with our partner TEB Securities Services, to make settling in Turkish instruments safer and easier for international investors, by becoming the first foreign CSD with direct omnibus account access to the market,” added Frank Slagmolen, deputy head of global capital markets, Euroclear.
BNP Paribas Securities Services and Turk Ekonomi Bankasi (TEB) launched TEB Securities Services in 2007, offering clearing and settlement, custody, asset servicing and tax services, as well as Turkish Lira cash and liquidity management services to foreign financial institutions.