Clearstream worked with Consort1, a financial technology company specializing in repurchase agreements and securities lending, to help put secure deposits into a tri-party custodial account.
Standard Chartered Bank, NatWest, Alpha Group, BankClarity, and Arlingclose teamed up with Gloucestershire County Council to use the new placement service. This made the council one of the first local authorities in the UK to do so.
UK local authorities, corporates, fund managers, and other institutions can now make secured deposits through the wholesale repurchase agreement and securities lending market, which was not previously possible.
Secured deposits provide advantages for investment, including the ability to spread money across different areas. The cash is also insured against bank failure since it is backed by government bonds, corporate bonds or other securities held by Clearstream as a third-party guardian for the depositor. This way, in the case of a bank collapse, the depositors would still remain safe with the value of the collateral they hold.
Head of Collateral, Lending and Liquidity Solutions at Clearstream, Marton Szigeti, said:
Clearstream’s best-in-class custody solution adds highest liquidity and security for stable cash to help our bank clients better manage their regulatory liquidity requirements. We are delighted to be working closely with the Consort1 team to deliver the benefits of tri-party to a segment of clients that would previously have been excluded from the market.
co-founder and CEO of Consort1, Justin Clapham, said:
We are proud and truly honoured to be working with Clearstream to bring the repo and collateralised secured deposit service to institutions that have not been able to access this before. Along with our global partners, we are thrilled to be at the forefront of this innovation in the financial industry.
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