13 April 2017
Luxembourg
Reporter: Mark Dugdale

Clearstream tackles German debt with link to LCH’s RepoClear


Clearstream has begun offering a new settlement solution for German debt for customers that clear German bonds and repos through LCH.

The move follows LCH’s extension of its RepoClear service to cash and repo trades on German government securities last month.

Trades cleared through LCH’s Paris subsidiary can be settled in Clearstream Banking Luxembourg accounts.

Combined with Frankfurt as an existing settlement location, Clearstream customers will be able to settle transactions either in central bank money via Frankfurt or in commercial bank money via Luxembourg.

The new service for German bonds and repos will also take advantage of Cleastream’s links to the Target2-Securities (T2S) platform, giving customers the ability to settle their German government securities in Frankfurt as the German central securities depository (CSD), while benefiting from Luxembourg’s securities lending and collateral management services as an international CSD.

LCH’s new offering covers trades on German government and regional debt. Clearing members are able to use Clearstream Bank Frankfurt or Euroclear France as their CSD, or Euroclear Bank as a settlement agent.

Christophe Hémon, CEO of LCH SA, said: “The implementation of T2S brings with it an opportunity to expand the number of European trades eligible for balance sheet netting, providing greater operational and capital efficiency for our members. It will also allow our members to benefit from potential margin savings thanks to risk offsets among four main European debts.”

RepoClear already clears trades on Italian, French and Spanish government securities. The availability of clearing trades on German debt will also continue to be offered through LCH in the UK.

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