AMSTERDAM, the Netherlands, BRUSSELS,
Belgium, LONDON and STOCKHOLM, Sweden, June 19, 2018 (GLOBE
NEWSWIRE) -- ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have
completed a joint proof of concept to make the use of securities
more efficient when used to cover margin calls, including after
business hours, using blockchain, or distributed ledger technology
(DLT).
This solution addresses significant business
challenges and inefficiencies related to the current provision of
collateral to Central Counterparties (CCPs) and has demonstrated
that a shared, resilient network can be built between collateral
givers, collateral takers and intermediaries.
The inefficiencies of collateral processing have
been heightened as a result of recent market changes such as
extended trading hours by stock exchanges and the requirement to
centrally clear derivatives traded bilaterally (OTC) under the
European Market Infrastructure Regulation (EMIR). Today, a CCP
margin call typically needs to be covered by euro collateral within
a short time frame. After the regular hours of central banks and
central securities depositories, usually ending at 18:00 CET,
options are limited. Several CCPs currently allow for the use of
securities to cover intraday (evening) initial margin calls, but
this method is rarely used due to inefficient and complex
securities delivery processes.
As an increasing number of buy-side market
participants centrally clear their derivatives trades, the need to
provide an efficient securities collateral solution has become
essential. Using the solution developed in the proof of concept,
parties were able to handle the margin call, the securities
collateral delivery and the return process within minutes. Clearing
participants and CCPs were able to optimise their collateral
positions through a collateral dashboard.
The underlying collateral transfers were processed
by Euroclear's Central Securities Depository, ensuring settlement
finality and regulatory compliance.
Nasdaq developed the proof of concept for the DLT
nodes while ABN AMRO Clearing, EuroCCP and Nasdaq Clearing
developed a specific front-end and managed integration into their
own environments.
Coen van Walbeek, Global Head of Treasury and SBL
at ABN AMRO Clearing said: "With a faster and more globalised
market, it is essential to make the processing of collateral more
efficient. Expanding the possibilities to use securities as
collateral will make clearing through CCPs more attractive and
cheaper for buy-side market participants. This is a breakthrough
for the CCP model."
Diana Chan, CEO at EuroCCP said: "We are excited
to be partnering on a proof of concept that is extremely
useful for transactions that are not already well-served by market
infrastructures. With a solution like this in place we will be able
to efficiently provide counterparty risk protection of equity
trades after hours while reducing operational complexities. Today
we are limited by European banking hours or arrangements in other
time zones."
Walter Verbeke, Global Head of Business Model and
Innovation at Euroclear added: "As a major collateral house,
holding € 28.5 trillion worth of assets, we are pleased to
participate in this initiative. It demonstrates that a smart
combination of NewTech and the resilience of the Central Securities
Depository can work effectively and in full compliance with
regulatory requirements."
"As both a leading market technology provider and
a CCP operator, Nasdaq is uniquely positioned to bring efficiencies
to collateral management. We believe that blockchain technology
brings with it a huge potential to transform markets everywhere,
and this project is an excellent showcase of this," said Julia
Haglind, CEO of Nasdaq Clearing.
About ABN AMRO
Clearing
ABN AMRO Clearing is one of the world's leading
providers of clearing and financing services for listed derivatives
and cash securities, OTC products, warrants, commodities and FX.
With 11 offices globally employing more than 800 staff, ABN AMRO
Clearing services clients on 160+ exchanges, MTFs and FX liquidity
centres and consistently ranks as a top 3 clearer in most time
zones. We consistently post over 20% market share of
transactions cleared on most relevant derivatives exchanges
globally. ABN AMRO Clearing offers an integrated approach to global
transaction processing, financial logistics and risk management and
processes over 16 million trades per day.
ABN AMRO Clearing received the FOW Award as the
'Proprietary Traders' Clearing Firm of the Year' (Dec 2013, 2014,
2015, 2016,2017); the CTA Intelligence Award for FCM - Best Client
Service (US, Jan 2015 and 2016; Europe, Nov 2016), FCM - Innovation
(US, Jan 2017; Europe, Nov 2017) and Best FCM - Overall
(Europe, Nov 2015). We also received the HFM-Week Service
Award for Best Prime Broker - Client Service (Europe, Apr 2016).
For more information: www.abnamroclearing.com
About EuroCCP
EuroCCP clears equities traded on stock exchanges,
multilateral trading facilities and other trade sources. After a
trade has been executed, EuroCCP centrally manages counterparty
risk for trading firms and reduces their post-trade costs through
netting. EuroCCP is the most connected CCP in Europe, with access
to 82% of equity trades executed on 26 trading platforms. EuroCCP
clears equities, ETFs and depositary receipts listed in 19 national
markets including the United States.
EuroCCP is headquartered in Amsterdam, equally
owned by the stock exchanges Cboe Europe, Euronext and Nasdaq, by
ABN AMRO Clearing Bank and by The Depository Trust & Clearing
Corporation (DTCC).
About Euroclear
Euroclear group is the financial industry's
trusted provider of post trade services. At the core, the group
provides settlement, safe-keeping and servicing of domestic and
cross-border securities for bonds, equities and derivatives to
investment funds. Euroclear is a proven, resilient capital market
infrastructure committed to delivering risk-mitigation, automation
and efficiency at scale for its global client franchise.
The Euroclear group includes Euroclear Bank -
which is rated AA+ by Fitch Ratings and AA by Standard & Poor's
- as well as Euroclear Belgium, Euroclear Finland, Euroclear
France, Euroclear Nederland, Euroclear Sweden and Euroclear UK
& Ireland. The Euroclear group settled the equivalent of EUR
733 trillion in securities transactions in 2017, representing 215
million domestic and cross-border transactions and held EUR 28.6
trillion in assets for clients.
About Nasdaq
Nasdaq (Nasdaq:NDAQ) is a leading global provider
of trading, clearing, exchange technology, listing, information and
public company services. Through its diverse portfolio of
solutions, Nasdaq enables customers to plan, optimize and execute
their business vision with confidence, using proven technologies
that provide transparency and insight for navigating today's global
capital markets. As the creator of the world's first electronic
stock market, its technology powers more than 90 marketplaces in 50
countries, and 1 in 10 of the world's securities transactions.
Nasdaq is home to approximately 3,900 total listings with a market
value of approximately $13 trillion.
To learn more,
visit: http://business.nasdaq.com
For further information
please contact
ABN AMRO Clearing: Brigitte Seegers +31 20
6283365, brigitte.seegers@nl.abnamro.com
EuroCCP: Jeff Watt, Greentarget, +44 207 324
5482, jeff.watt@greentarget.co.uk
Euroclear: Inge Drijkoningen, +32 2 326
4431, inge.drijkoningen@euroclear.com
Nasdaq: David Augustsson, +46
734496135, david.augustsson@nasdaq.com
-NDAQG-
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Nasdaq via Globenewswire
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