From November 17 onwards, mutual customers will be able to consolidate their assets held across both institutions into one single pool to perform collateral management transactions with any Clearstream collateral receiver. The service is part of Clearstream’s integrated collateral management offering, the Global Liquidity Hub.
The automated collateral allocation is performed in real-time and only up to the required amount. In addition, the system will also identify and allocate the ideal collateral, meaning the cheapest collateral option to match the underlying exposure requirements.
When the assets are required for local settlement in Singapore or are no longer needed for triparty purposes, they are returned automatically to the customer’s settlement account at Standard Chartered.
The automated procedures can be used to allocate collateral held in Singapore to cover global exposures with any counterparty in Clearstream.
"This greatly streamlines collateral management for Singaporean assets and enables our customers to maximise the use of these assets, thereby overcoming one of the most pressing challenges faced by the industry today, collateral fragmentation,” said George Nast, global product head, transaction banking at Standard Chartered.
“We have received positive feedback from the market and customers have started to sign up already – we expect first transactions to take place in the week the service goes live on 17 November," said Stefan Lepp, member of the executive board and head of global securities financing at Clearstream.
In addition to the collaboration with Standard Chartered, Clearstream is also partnering with the Singapore Exchange (SGX) under the Liquidity Hub GO (Global Outsourcing) service which will bring a collateral management solution to the Singaporean market as a whole.