ASX develops risk management service

The Wall Street Journal Online.

Clearstream, the Deutsche Boerse-owned post-trade group, says it will provide a collateral risk management solution to the Australian market.

With the offering, ASX clients will be able to manage collateral holdings and exposures in the Australian market more efficiently in an effort to improve risk management. Financial terms of the agreement were not disclosed.

The Australian says the service, which was introduced in Brazil, has been popular with large banks looking to satisfy new global liquidity rules coming from the Basel accords and other international regulations being proposed, as well as with central banks and other large money operators looking to manage risk in real time.

Australia would become the second market to use Clearstream's real-time collateral management outsourcing service, following Brazil's Cetip, according to Financial Times.

While rivals also offer collateral outsourcing services, Clearstream says it is the only one that keeps assets in domestic markets, under local authority jurisdiction. Many regulators prevent assets used for collateral to be taken out of the country.