Euroclear and Citi Partner for Collateral Management

Euroclear Bank and Citi have announced that they will collaborate on a collateral arrangement that allows mutual client assets held at the latter to be used through the former's tri-party services.

Under the aegis of the new agreement, equity and fixed income positions held in Citi's custody network will become eligible collateral when Euroclear manages the process and is selected as the tri-party agent. Citi retains its custodian role, and collateral will be moved via Euroclear's Collateral Highway Service.

"The alliance with Euroclear Bank gives our clients seamless and instant access to the services of a leading triparty agent," says Sanjiv Sawhney, EMEA head of securities and fund services at Citi. "As a result, the assets they deposit with Citi can be considered part of the inventory of securities that can be used to fulfil collateral requirements in tri-party managed deals. This solution further demonstrates Citi's commitment to developing an open architecture which allows our clients to access liquidity pools seamlessly and eliminate collateral fragmentation, thereby creating significant efficiency gains."

Citi also announced a similar partnership with Clearstream today, focusing on allowing Citi customers to consolidate collateral within a single pool, which can be used through Clearstream's Global Liquidity Hub.