08 May 2017
Zürich
Reporter: Drew Nicol

SIX expands equity repo baskets list


SIX Repo has launched two new European equity index baskets for its CO:RE trading platform.

The CAC 40 and FTSE 100 baskets are open to equity repo financing and will be added to existing baskets list that track the Swiss SMI 20, the German DAX 30, the MIB 40 and the Spanish IBEX 35 index.

The decision to launch fresh equity repo baskets was driven by the increasing demand for equity repo financing, according to SIX.

Equity repos, baskets reproducing market indices, supplement the Swiss National Bank’s (SNB) high-quality liquid asset (HQLA) baskets, SNB HQLA 1 and 2, which are traded via counterparties on the CO:RE trading platform.

Nerin Demir, head of SIX Repo, commented: “Different banks and non-bank financial institutions in the repo market have an interest in taking in more equity as collateral due to its liquidity, availability and for the diversification factor.”

“There is a clear trend for equity and fixed income financing desks to come closer together and work towards a more singular view of the available collateral pool. This in turn attracts new participants, the latest of which is Natixis—the first of many new participants we are looking forward to welcoming aboard.”

Ian Beattie, head of client development on the equity finance desk at Natixis and SIX client, said: “The straight-through processing capabilities of SIX, combined with the access to a broad range of counterparties makes the platform an attractive financing tool.”

“Easy to use, it can cater for large volumes of transactions and is particularly supportive for equity repo transactions. We are looking forward to building balances and working with counterparties on CO:RE trading platform.”

Another SIX Repo client, Thomas Roth, head of cash and collateral management at Bank Vontobel, added: “Having as many products as possible on a standardised platform like SIX Repo’s CO:RE trading platform provides participants with the necessary flexibility to cover their needs and supports increasing volumes to fulfill the financing requirements within different asset classes.”

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