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LCH RepoClear SA has merged its RepoClear euro debt service, which includes specials and general collateral, with its €GCPlus service.
The Paris-based clearing house will combine its €GCPlus liquidity with the €3.3 trillion RepoClear liquidity pool to unlock additional netting opportunities for members.
€GCPlus is a general collateral triparty basket repo clearing service that was launched in collaboration with Euroclear and Banque de France in 2014.
The clearing house says the transition will enable “quick and easy access” to secured liquidity and enhanced collateral management capabilities. It also aims to create alternative routes to access liquidity in the general collateral segment through the euro cleared liquidity pool.
According to LCH RepoClear SA, members of the clearing house will benefit from cost reductions through payment into a single default fund, as well as further operational efficiencies including the introduction of one set of margin calls and reports across combined services.
Clearing members can now lend specific securities and recycle the cash proceeds into €GCPlus, therefore reclaiming their asset inventory in one single ecosystem, the firm adds.
RepoClear SA anticipates that a number of financial institutions will benefit from access to a single liquidity pool.
The firm explains that it can ease resource management pressures that derive from balance sheet constraints through its Sponsored Clearing model, allowing buy-side access to cleared liquidity and releasing resource capacity for banks.
Commenting on the news, Emmanuel Rolland, chief operating officer of RepoClear, collateral and liquidity management, says: “We are delighted to build on our collaboration with Euroclear and Banque de France to offer the sell side and buy side alternative access to general collateral liquidity and the euro cleared pool with enhanced collateral management capabilities.
“The merger of our two services means that financial institutions will benefit from even greater netting opportunities, reduced margin requirements, harmonised reporting and operational processes.”
Olivier Grimonpont, managing director, head of product management and market liquidity at Euroclear, adds: “This merger is the natural evolution of the service which has seen growing interest from fixed income, treasury desks and other key market participants to manage Eurosystem-eligible collateral efficiently and to generate liquidity in a cleared environment.
“By combining these solutions, LCH RepoClear is able to offer an efficient and truly robust solution to clients utilising the strengths of our long standing partnership.”
