The Canadian Collateral Management Service may help firms with T+1 settlement.
TMX Group and Clearstream have launched the first domestic tri-party repo capability for the Canadian market, dubbed the Canadian Collateral Management Service (CCMS), which has already transactions via the support of BMO, CIBC, RBC, Scotiabank, and TD, officials say
The service will support collateral management within the shorter, T+1 settlement requirements that take effect later this month, officials say.
“CCMS will also be extending its services to corporate cash tri-party repo for the first time in Canada with subsequent expansions into securities lending and the use of equities collateral later in the year. Additionally, further automation capabilities will be enabled over the coming months,” according to the announcement.
The five global banks that are behind CCMS “have participated in the inaugural trades, which have been cleared successfully with the Canadian Derivatives Clearing Corporation (CDCC),” officials add.
The effort “represents an optimized financing solution supporting the cessation of banker’s acceptances (BAs) … following the cessation of the Canadian Dollar Offer Rate (CDOR) on June 28, 2024,” officials say.
The CCMS is intended to “help market participants solve legacy technical challenges and operational limitations by automating the end-to-end lifecycle of a repo trade,” officials say. The effort will be focused on “optimizing collateral within the market.”
CCMS “will help the development of an active two-sided term repo market which will support liquidity in cash products,” says Harri Vikstedt, senior policy director, Bank of Canada and co-chair, Canadian Infrastructure and Market Practices Advisory Group (CIMPA), in a prepared statement.
“As the Canadian market moves toward T+1, CCMS will also play a pivotal role in supporting this critical transition,” says Steve Everett, head of post trade innovation, TMX Group, in a statement
TMX Group operates the Toronto Stock Exchange, the Canadian Depository for Securities (CDS), TSX Venture Exchange, TSX Alpha Exchange, Montréal Exchange, Canadian Derivatives Clearing Corp., TMX Trayport and TMX VettaFi.
Clearstream Banking S.A. (Clearstream), an international central securities depository is part of the Deutsche Börse Group.
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