After trading and clearing, Clearstream – Deutsche Börse Group’s post-trade services provider – supports market participants in settling their delivery obligations and taking all product types into custody. These products can then be used as collateral.
Post-trade services make capital markets safer. They guarantee the smooth settlement of a transaction, i.e. they ensure that the individual positions are processed correctly after a transaction is completed and cash is exchanged for securities. Another function of post-trading is to credit the customer’s custody account and ensure the custody of securities at a central location.
Clearstream is responsible for settling securities transactions worldwide and for the custody of securities. Clearstream manages the assets while they are in custody and offers services such as performing corporate actions, dividend payments or tax services (asset servicing). Customers are also able to use certain securities as collateral for further transactions. Clearstream thus provides the post-trade infrastructure for bonds, shares, investment funds and other asset classes traded in Germany and internationally.
With its international network of depositories, Clearstream covers over 50 markets worldwide. Apart from its main locations in Luxembourg, Frankfurt/Eschborn, Prague and Singapore, Clearstream has representative offices in Cork (Ireland), Dubai, Hong Kong, London, New York and Tokyo.
Clearstream processes more than 10 million transactions per month, involving over 850,000 securities. All in all, the company holds more than €13 trillion worth of shares, bonds and funds in its custody depositories – this is around four times the German gross national product.
Global Liquidity Hub
The Global Liquidity Hub, a liquidity and risk management platform, offers integrated securities lending and collateral management services for a number of asset classes, among them fixed-income securities and shares. Among other things, customers can fulfil their collateral obligations towards the central clearing houses and cover exposures globally via the Global Liquidity Hub. It enables connected financial institutions to maximise the benefit of those assets that they use as collateral. In this way, Clearstream enables customers to meet new regulatory requirements for collateralising capital market transactions more efficiently. Corporate treasurers also increasingly need liquidity management to conserve their own capital and mitigate financial risk.
In an environment where banks operate globally, Clearstream’s advantage is that the customers’ collateral is immediately available anywhere. A unique selling point is that customers’ assets used as collateral remain in their home markets.