Collateral management solution for Singapore 06 November 2014Singapore Reporter: Stephen Durham
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Clearstream and Standard Chartered Bank have implemented a collateral management service for Singapore.
From 17 November 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.
Assets held by a customer in an account with Standard Chartered in Singapore are now automatically moved to a Clearstream account at Standard Chartered when they are needed as collateral, thereby relieving customers of manual collateral transfers and allocations.
These automated procedures can be used to allocate collateral held in Singapore to cover global exposures with any counterparty in Clearstream.
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.
George Nast, global product head of transaction banking at Standard Chartered, said: “I am pleased that mutual customers of Standard Chartered and Clearstream are now able to optimise their inventory held in custody with us in Singapore, by seamlessly and efficiently allocating it to cover their global exposures from a single collateral pool.”
“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.”
The collateral management service will initially be rolled out for Singapore with other Asian markets such as Hong Kong to follow.
In addition to the collaboration with Standard Chartered, Clearstream is also partnering with the Singapore Exchange (SGX) under the Liquidity Hub Global Outsourcing service, which will bring a collateral management solution to the Singaporean market as a whole.
Under this partnership, SGX will white-label Clearstream’s collateral management services to cover domestic exposures in Singapore.
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