Singapore Exchange and Clearstream to launch collateral management service

  • Singapore Exchange (SGX) and Clearstream to jointly offer a collateral management
  • SGX customers will benefit from more efficient use of their assets held with SGX’s Central Depository (CDP) as collateral
  • Singapore is first Asian market to use Clearstream’s Liquidity Hub GO (Global Outsourcing) service

SGX and Clearstream have signed a Letter of Intent on the launch of a collateral management service which enables customers to more easily and efficiently use assets held at SGX’s securities depository, CDP, for their collateral needs.

Under the agreement, SGX uses Clearstream’s collateral management infrastructure, the Global Liquidity Hub, and offers its Liquidity Hub GO service, to enable collateral to be allocated, optimised and substituted on a fully automated and real-time basis. Singapore’s market infrastructure remains strong as the service ensures collateral remains within domestic jurisdiction.

Muthukrishnan Ramaswami, President of SGX, said: “We are pleased to partner with Clearstream in providing our customers a collateral management offering which meets their needs at a time when they are increasingly concerned about risks and regulatory changes. We will also work with Clearstream to expand this offering to other markets in the region. By becoming the first Asian securities depository to offer this service, we strengthen and enhance Singapore’s position as a leading financial centre.”

Jeffrey Tessler, CEO of Clearstream, said: “We are delighted to expand the Liquidity Hub GO partnership model to Singapore Exchange and to bring our unique collateral management outsourcing solution to Asia. Together with SGX, we will be able to develop a tailor-made collateral management solution for Singapore in a very short time-to-market. High quality collateral is scarce and increasingly expensive – making it available is also a top industry priority in Asia. SGX and Clearstream will soon be able to jointly address this major industry challenge for the Singapore and Asian markets.”

Clearstream’s Liquidity Hub GO service went live with the Brazilian CSD Cetip in July 2011 and will be launched with ASX, Australia, the South African CSD Strate and Spanish CSD Iberclear in the course of 2013. Canadian CDS CSD has also signed a Letter of Intent with Clearstream. The initiative has gained momentum as upcoming regulatory changes require financial and non-financial institutions to improve their capital management. Clearstream is the only collateral management services provider with a proven ability to manage collateral across time zones without transferring assets out of the respective domestic environment.


About Singapore Exchange (SGX)

Singapore Exchange (SGX) is the Asian Gateway, connecting investors in search of Asian growth to corporate issuers in search of global capital. SGX represents the premier access point for managing Asian capital and investment exposure, and is Asia’s most internationalised exchange with more than 40 percent of companies listed on SGX originating outside of Singapore. SGX offers its clients the world’s biggest offshore market for Asian equity futures, centred on Asia’s three largest economies – China, India and Japan.

In addition to offering a fully integrated value chain from trading and clearing, to settlement and depository services, SGX is also Asia’s pioneering central clearing house. Headquartered in Asia’s most globalised city, and centred within the AAA strength and stability of Singapore’s island nation, SGX is a peerless Asian counterparty for the clearing of financial and commodity products.

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About Clearstream

Clearstream is the leading global provider in liquidity and collateral management services with more than 20 years of experience in this field.

As an international central securities depository (ICSD) headquartered in Luxembourg, Clearstream provides the post-trade infrastructure for the Eurobond market and services for securities from 53 domestic markets worldwide. Clearstream’s customers comprise approximately 2,500 financial institutions in more than 110 countries. Its services include the issuance, settlement and custody of securities, as well as investment fund services and global securities financing. With around EUR 11.6 trillion in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities.

As a central securities depository (CSD) based in Frankfurt, Clearstream also provides the post-trade infrastructure for the German securities industry, offering access to a wide number of markets in Europe.

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