Newedge UK Financial and EuroMTS will promote Euroclears collateral management and securities financing infrastructure as a means to manage collateral for triparty repo transactions conducted on the Newedge/MTS Agency Cash Management (ACM) platform in Europe.
ACM is a market-led, auction-driven platform for triparty repo transactions between cash and collateral providers geared towards the institutional repo market. Cash providers are generally hedge funds, pension funds, corporates, central banks, family offices, investment managers and bank treasurers, whereas collateral providers are usually investment banks, commercial banks and asset managers.
Tim Howell, CEO of Euroclear, said: The agreement with Newedge and MTS will go very far in ensuring best execution of Agency Cash Management triparty repo deals on a straight-through basis. Given the caution with which market participants are managing risk in the current environment, the Collateral Highway helps cash givers and receivers mitigate counterparty risk by easily collateralizing credit exposures with diversified pools of securities on a segregated basis. We are delighted to work closely with Newedge and MTS as a post-trade provider for the Agency Cash Management market. We are well equipped to work with even more counterparties, including non-bank institutions, to bring additional and welcome liquidity to the European repo markets.
Jack Jeffery, CEO of MTS, said: The ACM platform was launched in response to demand from customers for secured money market investments and the transparency offered by electronic trading. We recognize the sophistication and appeal of Euroclears Collateral Highway and the advantages it will bring to our present and future participants. The Agency Cash Management market will significantly benefit from this initiative.
Nicolas Breteau, CEO of Newedge, said: The new regulatory framework brings significant changes to the way institutional investors manage cash and collateral. Linking the ACM platform with Euroclears Collateral Highway creates a unique solution that helps participants to maximise the efficiency and transparency of their repo transactions and to meet all pre- and post-trade, operational and inventory management obligations.
The MoU also covers an agreement to jointly market the service.
(JDC)