Collateral management
Triparty Collateral Management Service (TCMS)
Clearstream can collateralise various types of principal agreements that the counterparties may have entered into, such as:
- Bilateral cash loans;
- ISDA/CSA margining;
- Collateralisation for central bank credit and liquidity programs;
- Collateralisation for CCP margin requirements;
- Collateralisation of securities lending transactions etc.
Unlike a repo trade, these are stand-alone transactions which are carried out by the counterparties independently of Clearstream. For example, the service can be used to cover an exposure resulting from a bilateral or OTC trade regardless of where the transaction was concluded. Clearstream simplifies the collateral administration for both the collateral receivers and the collateral givers.
Collateral is delivered free of payment from the collateral giver’s account to the collateral account. Clearstream performs a daily mark-to-market valuation of the collateral securities and instructs margin calls to keep the collateral value in line with the underlying exposure. Since Clearstream has no information on the underlying trade, any change in its value must be communicated by the counterparties.