OSTTRA’s Traiana Equity LimitHub along with BNP Paribas Securities Services extend clearing of European OTC equities in support of Central Securities Depository Regulation (CSDR) settlement discipline regime.
The new service comes at a pivotal time when market participants are seeking additional ways to mitigate settlement risks costs ahead of the CSDR deadline in February 2022.
The post-trade solutions company said the service will allow sponsoring General Clearing Members (GCMs) to credit check and approve their Non-Clearing Member clients (NCMs) to clear European OTC equities via multiple CCPs, ahead of February’s CSDR deadline.
Equity LimitHub will offer sponsoring GCMs the ability to create and manage credit limits, as well as execute limit and authorisation checks for NCM broker and swap providers.
This will enable sponsored NCMs to join Traiana’s Equity CCP network for clearing, which can aid in reducing settlement costs and risk associated with bilateral settlement.
The EU regulation encourages buyside firms, banks and brokers to settle European market transactions in a timely manner to reduce the chances of failing trades and any associated buy-ins.
“The launch of Traiana’s Equity LimitHub service comes at a time when the market is looking to clear more OTC equities flow to benefit from settlement and capital efficiencies, especially in preparation for the CSDR mandate,” says Camille Papillard, head of clearing and settlement products at BNP Paribas Securities Services.
She adds, “The new limit tool will enable BNP Paribas Securities Services to monitor our extensive NCM broker and swap provider client portfolio to approve their daily trading activity for clearing using our General Clearing Membership status.”
Joanna Davies, OSTTRA’s head of FX and securities business development, says, “The expansion of our LimitHub service into equities will enable more NCM firms to clear their European market flows via our Equity CCP Connect network, helping them to access the benefits of clearing, especially with CSDR around the corner.”