TMX Group Limited, operator of the Toronto Stock Exchange and core Canadian trading infrastructure, including the Canadian Depository for Securities (CDS), and Clearstream Banking SA, the international central securities depository of the Deutsche Börse Group, today launched the new Canadian Collateral Management Service (CCMS).
Developed by TMX Group and Clearstream, CCMS facilitates the optimization and underwriting of securities financing activities across the Canadian market and provides exclusive domestic three-party repurchase capabilities to increase liquidity and minimize exposure risk.
BMO, CIBC, RBC, Scotiabank and TD made initial trades through Canada’s first three-party repo solution.
Tripartite repos provide a viable investment alternative for market participants seeking liquidity and managing risk exposure. This will be particularly important following the disappearance of BAs following the cessation of the Canadian Dollar Offered Rate (CDOR) on June 28, 2024.
CCMS will help market participants solve legacy technical challenges and operational limitations by automating the end-to-end lifecycle of a repo transaction, optimizing in-market collateral and truly democratizing the repo market.
The first live three-party repo trades serve as a critical factor in terminating BAs, as well as an effective platform for collateral management in a T+1 settlement environment. CCMS will also expand its services to corporate tri-party cash repos for the first time in Canada with subsequent expansions into securities lending and the use of equity collateral later in the year. Additionally, further automation features will be enabled in the coming months.
Marton Szigeti, Head of Collateral, Lending & Liquidity Solutions, Clearstream, said:
“As the financial landscape evolves toward faster and more efficient markets, we remain committed to empowering our customers with reliable and scalable state-of-the-art solutions. Our Canadian collateral management service ensures our clients can navigate changes like the move to T+1 with confidence, enabling them to stay ahead of an ever-evolving market environment. We look forward to continuing to anchor and grow our support for the domestic finance and financing market together with TMX Group.”
Steve Everett, Head of Post Trade Innovation, TMX Group, said:
“Through this partnership with Clearstream to develop a customized mobility and liquidity solution for Canada’s secure financial sector, TMX Group demonstrates its commitment to delivering innovative market-driven solutions that help improve markets. The CCMS will enhance our clients’ ability to adapt to the ever-changing collateral requirements of today’s markets, while facilitating the expansion of repos as a viable investment avenue for both Canadian buy-side and sell-side participants. As the Canadian market moves towards T+1, CCMS will also play a central role in supporting this critical transition.”