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About the services

The collateral (or guarantee) management services are increasingly demanded by the different types of financial participants, allowing them to maximise their funding capacity, optimise their liquidity and reduce operational risks. Furthermore, these services enable organisations to adapt to regulatory changes, which will require financial and non-financial institutions to increase the collateralisation of all their activity. To achieve this they will have to optimise their liquidity and increase efficiency in the management of guarantees to be contributed as a result of its financing operations or hedging.

The main feature of the collateral management service is that it offers solutions to the two counterparties to a financing transaction, such as a sale and repurchase agreement, in which cash is exchanged in return for a guarantee between the cash provider (or receiver of collateral) and the cash taker (or contributor of collateral), both of which agree to unwind the transaction within a determined period of time. By outsourcing the processes of selection, management and optimisation of the securities provided as collateral to a third party (the collateral agent or manager), the parties remove operational risk and significantly reduce the costs of manual assignment.

Iberclear has developed its own collateral management services, which is offered to its Participants. The services have been developed in collaboration with Clearstream Banking Luxembourg, by technically outsourcing its collateral management system, one of the most valued by the financial industry. Iberclear is the first European supplier of post-trading services to outsource its domestic allocation, optimisation and substitution of collateral to the collateral management system Global Liquidity Hub, operated by Clearstream.

Iberclear's Participants may engage the services of collateral for its entire portfolio of Fixed Income securities, including those issued in other CSDs and registered in the accounts of Iberclear through connections established with such depositories.

In this first stage of implementation, it will be possible to collateralise all monetary policy transactions with the Bank of Spain through Iberclear as well as any kind of bilateral transactions between participating entities, whether against payment or free of payment.

 

 

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