TMX Group and Clearstream Banking have announced their collaboration to introduce a new automated Canadian Collateral Management Service (CCMS).

This initiative aims to leverage the strengths of both organizations to develop and deliver CCMS, which will include Canada’s first domestic triparty repo capability.

The partnership between TMX Group and Clearstream is driven by their commitment to providing innovative solutions to client challenges and enhancing Canada’s financial ecosystem.

TMX Group CEO John McKenzie said: “We are pleased to work together with Clearstream, a world-leader in post-trade infrastructure and securities services in pursuit of a customised mobility and liquidity solution for Canada’s secured finance industry.

“In keeping with our purpose to make markets better and empower bold ideas, TMX is firmly committed to seeking out innovative, workable solutions to client challenges and strengthening Canada’s financial ecosystem.

“The new CCMS will enable our clients to better meet the continuously evolving collateral requirements of today’s markets, while supporting the growth of repos as an investment product for Canadian buy and sell side clients.” 

The CCMS will enable clients to meet the evolving collateral requirements of today’s markets while supporting the growth of repos as an investment product for Canadian market participants.

Clearstream’s collateral management strategy focuses on delivering reliable and scalable solutions that reduce trading costs through transparency and automation.

By partnering with TMX Group, Clearstream aims to bring its proven triparty repo capability to the Canadian market. The CCMS will enhance liquidity, efficiency, and risk management while facilitating the industry’s transition to a T+1 settlement cycle in Canada and the US markets by 2024.

Scheduled for launch in the third quarter of 2023, the CCMS will optimise and collateralise securities finance activities across the Canadian market.

Initially, the service will be available to participants in Canada’s secured funding market, streamlining the transaction cycle with automation and efficiency. It will support the industry’s shift to a T+1 settlement cycle, promoting increased operational efficiencies, collateral mobility, and reduced risk.

Clearstream Securities Services CEO Sam Riley said: “It is at the heart of Clearstream’s collateral management strategy to provide our clients with reliable and scalable state-of-the-art solutions that reduce the frictional costs of trading through transparency and automation.

“In TMX, we have found an excellent partner to deliver our proven first-class triparty repo capability to the Canadian market. CCMS will deliver increased liquidity and efficiency while minimising exposures, supporting the Canadian market on its endeavor to move to T+1.

“Clients will also benefit from Clearstream’s industry-leading technology and digital innovation, such as the cloud-based, digital collateral schedule capability known as OSCAR.”