European market participants are poised to receive a new multi-lateral trading facility for collateral and secured deposits, with the prospective launch of DBV-X, Tradition’s latest EU marketplace initiative, according to a Tradition statement.
DBV-X connects both buy-side and sell-side participants to a deep pool of liquidity, offering uniform access to a wide cascade of liquid assets capable of being traded as collateral in a regulated environment on a peer-to-peer (P2P) basis. DBV-X is targeting a Q4 launch date in 2015 and will be made available to corporates, asset managers, pension funds, insurance companies, hedge funds, brokers, dealers and banks.
DBV-X is also aiming to fortify transparency in markets, which will mandate all participants to sign a single standard legal agreement, whereby joining the platform and maintaining full control over the products and counterparties used.
The platform boasts many capabilities, and will be offering pre-trade counterparty anonymity, price transparency, one’s choice in execution models. Finally, within their respective risk limites, market participants will be able to automatically access a wide range of standardized liquid General Collateral (GC) baskets, encompassing a broad spectrum of eligible assets including government and corporate bonds.
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DBV-X has also tapped Euroclear to act as the platform’s Tri-Party agent in Europe. More specifically, the platform has adopted Euroclear’s RepoAccess GMRA-based legal model, fostering a simplistic and efficient counterparty framework.
According to John Wilson, Managing Director, Tradition and Head of DBV-X, in a recent statement on the enhancement, “The current regulatory and economic environment is driving fundamental change in funding and collateral markets – OTC clearing, the impact of leverage ratios on repo activity by banks and LCR on short-term deposits – as well as a clear shift away from unsecured collateral to secured deposits. This is driving the need for all firms to re-assess their treasury strategies and consider diversifying their counterparties.
“We’re thrilled to be working with Euroclear on this initiative, which has been warmly received by market participants during an extensive market engagement process. By offering full STP from order to execution to settlement, same-day settlement is enabled through Euroclear’s market leading Collateral Highway,” he noted.
“We would like to congratulate DBV-X on the launch of their electronic trading platform and are delighted that DBV-X have chosen Euroclear as the market’s tri-party agent. By connecting with Euroclear’s Collateral Highway, DBV-X’s clients will have fast, efficient and open access to a growing community of counterparties and an ever growing pool of collateral and deposits for trading, margin and funding requirements,” added Jo Van de Velde, Managing Director and Head of Product Management at Euroclear, in an accompanying statement.