ICE Clear Europe connects to Clearstream
ICE Clear Europe has hooked up with Clearstream’s triparty collateral management service, making it the third European clearinghouse to tie into the service. Eurex Clearing and LCH.Clearnet are already on board, which means clearing members are now able to access securities under custody at Clearstream to cover margin requirements for any of the three central counterparties through one account.
Previously, customers had to pledge collateral with a single clearinghouse or work with a special third-party provider. Clearstream executives said this service not only opens a new pool of liquidity for customers but also lightens their operational burden and reduces risk.
The hub’s real-time visibility makes it possible to collateralize an asset instantly, without making any actual physical transfer, according to Glen. “If there’s a need to move something now, it will move now. The system reacts without any bilateral process,” he explained.
The company is also negotiating with third-party custodians to make it possible for buy-side clients of global custodians to use the service to meet their margin requirements without having to open their own account at Clearstream. BNP Paribas, Citi, Deutsche Bank and Standard Chartered have signed up, and Glen said that Clearstream is negotiating with others as well. This service is expected to go live with Eurex Clearing next year.
