Eurex Clearing has worked with BrokerTec Europe Limited, an anonymous dealer-to-dealer platform for the fixed income markets run by NEX Markets, to launch a new clearing solution for the European repo market.
The new clearing solution will be live by the end of 2018 and will allow existing BrokerTec clients to select to clear their repo transactions via Eurex Clearing. This solution will allow market participants to consolidate their European repo and corresponding OTC and listed derivatives business under the single risk framework of Eurex Clearing, via the BrokerTec platform.
BrokerTec customers choosing to clear repo transactions will be able to optimise cross-asset portfolios more efficiently. This is becoming increasingly important in enabling competitive markets to adapt to fundamental changes, such as the UK’s departure from the EU and the European securities settlement engine, T2S.
Working together will allow BrokerTec and Eurex Clearing to target new clients and reach additional liquidity pools for its CCP.
Matthias Graulich, Member of the Executive Board, Eurex Clearing, states: “In the future, the scale and scope of our cleared markets will provide unique capital and balance-sheet netting opportunities for clients across repo and derivatives.”
John Edwards, Managing Director, BrokerTec Europe, said: “As the leading dealer to dealer trading venue for both Euro and Sterling denominated repos, there are emerging opportunities in a post- Brexit world, as well as a desire to extend and diversify the clearing choices that our customers have when trading repo. By working with Eurex Clearing, this connectivity offers our trading participants further options when settling Special and GC Repo transactions and providing capital efficiencies to our clients.”
On 25 October, Eurex Clearing announced plans to expand its Partnership Program to cover the funding & financing (Repo) and foreign exchange (FX) segments. You can read the full text of this press release here.