BNP Paribas Securities Services (BNP Paribas) today announced that it has extended its European clearing capabilities to be the first to provide third party clearing of bonds in France, Spain and Italy.
Previously, market participants wanting to clear fixed income products in those markets would have been required to become direct members of a central counterparty (CCP).
In extending its global clearing membership of LCH.Clearnet SA and CC&G to cover fixed income, BNP Paribas now offers market participants a complete set of solutions to optimise their post-trade processes and liquidity requirements.
"Fixed income is beginning to get back some of its lustre and increasing numbers of clients are turning towards clearing flows to reduce counterparty risk, as opposed to settling trades bilaterally," said Philippe Ruault, Head of clearing, settlement and custody products at BNP Paribas Securities Services.
"In parallel, ongoing legislation such as EMIR and Dodd Frank continues to push more instruments onto standardised clearing infrastructures. The combination of these factors is contributing to a real surge in demand," Mr. Ruault continued.
By outsourcing their clearing operations, market participants benefit from a reduction in flow complexity and the flexibility to choose a business model that is most appropriate for their requirements.
"Last year, the nominal value of European government bonds and repo trades cleared by LCH.Clearnet increased by around 30%, and we expect that number to increase further come the end of 2011," Mr. Ruault concluded.
The bank also expects to extend its memberships onto other CCPs to support increasing client demand and volume growth.