Euroclear enters a partnership with Transcend with the aim to introduce a new joint collateral optimization service.
The service will aim to bring together Euroclear’s collateral management infrastructure and data with Transcend’s optimization platform to address clients’ collateral optimization requirements.
The collab is announced before the 2024 Collateral Conference, Euroclear’s event for the collateral management community. The service is expected to launch in Q1 of next year.
Transcend is a tech firm providing solutions including inventory management, collateral eligibility as well as optimization.
These solutions help market participants achieve financial and operational performance by automating complex liquidity, funding and inventory decision making.
Transcend’s optimization platform leverages data from dealers, triparty agents, securities depositories as well as other key sources to allow for “holistic” optimization across “collateral venues and straight through processing of allocations and movements.”
Available via Euroclear connectivity, the service will integrate data for smart decision making and settle “optimized collateral allocations.”
By leveraging Transcend’s tech, clients will be able to configure optimization scenarios, include external collateral pools to determine the “best collateral use at Euroclear and perform ‘what-if’ analyses on specific constraints.”
Olivier Grimonpont, Head of Product Management, Market Liquidity at Euroclear, commented that new regulatory requirements “have made collateral optimisation a priority for dealers.”
Grimonpont added that this service brings to the market the combined expertise of Euroclear and Transcend.
It was also noted that Euroclear’s collateral management experience and robust infrastructure combined with Transcend’s optimization and booking technology offers a solution to “meet their clients’ needs for collateral optimization.”
Bimal Kadikar, Transcend’s founder and CEO said their technology is already used by the financial institutions and this joint service enables a quick way for Euroclear customers “to seamlessly take advantage of our sophisticated platform and capabilities,”
Euroclear group is the financial industry’s provider of “post trade services.”
Euroclear innovates to bring efficiency and connections to financial markets for “sustainable economic growth.”
Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering “risk-mitigation, automation and efficiency at scale for its global client franchise.”
The Euroclear group comprises of the following entities: Euroclear Bank, the International CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden, Euroclear UK & International.
As noted in the update, Transcend is a financial tech company with a mission to improve efficiencies in the capital markets.
Their modular tech helps clients achieve next-level performance via collateral, funding, liquidity & capital optimization solutions.
With connectivity to triparty agents, central counterparties (CCPs), custodians and nostros, Transcend is the partner for inventory analytics, optimization and automation “within a business line or across an enterprise.”
Transcend has a roster of FIs including GSIB banks, broker-dealers, custodians, asset managers and insurance companies.
