Extending the reach of secured funding and finance: A meeting point for the market

Clearstream’s Marton Szigeti and Eurex Repo’s Frank Gast reflect on a year of strong growth in cleared and triparty repo, high volumes in GC lending, new entrants to financing markets and steps to bring a wider range of digital assets into the collateral pool.The European repo market has experienced steady growth during 2025, with Eurex Repo volumes reaching all-time highs during Q4. The GC Pooling segment has been particularly strong, as the European Central Bank (ECB) continues to normalize its balance sheet and to reel in excess liquidity, supported by rising volumes from public sector cash providers and new entrants to cleared funding markets.The market is broadly positive for long-financing and negative for short-coverage, observes Marton Szigeti, head of collateral, lending and liquidity solutions at Clearstream. There has been a shift from an environment of collateral scarcity to collateral abundance where cash liquidity is both fragmented and in limited supply. Consequently, cash borrowers are needing to be more resourceful to find sufficient cash. Borrowing rates have gone up, term strategies are evolving and clients are looking to borrow against wider collateral sets.With a current pause in ECB interest rate reductions and with the Deposit Facility Rate (DFR) at two per cent, excess liquidity continues to fall and the euro short term rate-DFR spread (€STR–DFR) has narrowed, says Frank Gast, global head of business and product development repo dealer-to-dealer (D2D) at Eurex. Overnight borrowing is occasionally trading at, or slightly above, DFR, and term premia are re-emerging. The convergence in Eurozone sovereign spreads led to more inventory being financed in GC Pooling markets.Against this background, there has been rising demand for term repo, with three, six, nine, and 12-month contracts and with Eurex Repo’s first three-year repo being traded this year. “While this is not generalized across the market, we do see some counterparts now showing an appetite to step into ultra-long repo contracts,” explains Gast. This is being driven in particular by specialist structured financing trades between some counterparties.More broadly, for Gast, the ECB’s recent announcement that it will join the cleared repo markets as a member from Q1 2026 underscores the importance of robust infrastructure for secure and efficient repo transactions. With strong onboarding activity to cleared repo and a continuous pipeline of new clients at Eurex, more firms are attracted by the benefits and are clearing on a voluntary basis.From a securities lending perspective, the drivers of loan volume have changed significantly over the past 24–36 months. During 2022 and early 2023, loan demand was heavily driven by specials, particularly to cover short-interest trades and to support event-driven strategies. Now, activity is driven by high volume general collateral (GC) trading, with specials activity becoming comparatively rare. Any specials activity tends to be particularly in dollar-denominated, rather than in euro-denominated securities, notes Szigeti. “While there is significant demand for short term debt — US Treasuries of three-month and below for example — we have seen few special opportunities and, when they do emerge, they tend to be for just a few days,” he says. “Policymakers have generally been keen to prevent short-squeeze situations developing as part of their wider commitment to protecting financial stability.”In the uncleared financing markets, there has been a similar appetite for term liquidity, with some of the short-term financing in the market moving to longer term over the past 12 months and with firms seeking to load up their Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) buffers — holding high-quality liquid assets (HQLA) beyond the minimum thresholds required to meet their regulatory capital requirements — while conditions for sourcing HQLA remain relatively favorable.In its triparty environment, Clearstream has experienced growth both in uncleared repo and in central bank pledge. This pledge activity has been driven particularly by the release of the Eurosystem Collateral Management System (ECMS), the ECB platform for managing collateral used in Eurosystem credit operations, where Clearstream is currently the only triparty agent fully connected to ECMS and to the national central banks (NCBs) participating in Target2-Securities (T2S).Eurex Repo and Clearstream are building on this position to develop central bank and commercial bank money netting for cleared repo flows, with potential to re-use collateral into central bank pledge and for meeting uncleared margin rules (UMR) requirements via Clearstream triparty.Extending market accessEurex Repo has continued to experience rising demand in cleared repo from non-bank financial institutions (NBFIs) including buy side firms, pension funds, public institutions and corporate treasury. With growing numbers of non-banks coming into the cleared ecosystem, this delivered new inflows into Eurex Repo that have supplemented strong activity levels during 2024 and 2025 through Clearstream’s triparty service. Rather than a transfer of liquidity from uncleared to cleared repo, this largely represents new activity, particularly from corporate treasurers and other NBFI clients that have not previously been heavily active in cleared financing markets. Often these firms are exploring multiple channels, both cleared and uncleared, to manage their liquidity in a fragmented liquidity environment.TreasurySpring, a treasury management platform with offices in London, Jersey, and New York, is a prime example, already having a triparty relationship with Clearstream but complementing this with access to cleared liquidity markets through Eurex Repo. “For our counterparties, [this] unlocks a new universe of diversified funding sources within a capital efficient ecosystem,” says TreasurySpring CEO and co-founder Kevin Cook.Subsequently, TreasurySpring has introduced next-day fixed-term funds (FTFs) via its One+ product, representing euro-denominated instruments backed by centrally cleared overnight repo with one-day maturity. The objective is to bring together next-day liquidity with the efficiency and risk management benefits of central clearing collateralized by ECB-eligible high-grade collateral.For buy side firms, Eurex has continued to add new clients through ISA Direct, with about 10 additional firms across the pension fund, insurance and asset management segment onboarding to the program during 2025. ISA Direct currently supports approximately 10 per cent of volume through Eurex Repo.Streamlining access for buy sideTo enhance access to market for buy side clients, Eurex has established a new custodian model, through which the custodian will fulfil account opening and other initial set up requirements on behalf of smaller buy side clients. With the introduction of this custodian model, Eurex aims to simplify the onboarding of second and third-tier clients to cleared repo. This approach streamlines operational processes and reduces complexity for smaller participants. Furthermore, ABN Amro Clearing is pushing its agency clearing model for repo at Eurex, with the first successful onboarding of clients in Q4 2025.In parallel, Clearstream has been working to democratize buy-side access to secured financing markets through platform solutions. Clients of Clearstream and SimCorp — the investment management platform solutions provider that Deutsche Börse Group purchased in 2023 — can now view and instruct their triparty repo positions via the SimCorp One front end.The benefits of this arrangement have been particularly evident in the Canadian market, for example, where Clearstream has partnered with TMX Group to implement a full-service domestic triparty environment for the Canadian market. “For clients of SimCorp, which includes many of the Canadian pension funds, access to the triparty environment is streamlined through their SimCorp interface, which removes the need for technical integration and reduces their time to market,” says Szigeti.The Canadian Central Bank is scheduled to join this program during 2026 such that all of the central bank’s securities finance, repo and central bank pledge programs will be managed through this Canadian Collateral Management System (CCMS).“We are seeing real volumes on this Canadian platform now and these are expected to ramp up materially during the course of 2026 when the central bank comes on board, offering a highly liquid funding and financing platform,” says Szigeti.Eurex is also working to integrate the Simcorp One front end into its cleared services, including cleared repo, enabling users to post margin to the CCP via the SimCorp front end and with plans to integrate the F7 trading graphical user interface (GUI) into Simcorp One via an API.Connecting global investors to the Saudi capital marketIn Saudi Arabia, Clearstream has signed a memorandum of understanding with the Securities Depository Center Company (Edaa), the Saudi Arabian CSD which is part of Tadawul Group. Edaa’s foremost priority is to establish an efficient triparty collateral management service for the Saudi market. Here, Clearstream will work in partnership with the local market infrastructure, central bank and market community to create a cohesive single collateral market supporting repo, margin management, central bank pledge and securities finance.Managing collateral eligibility using data intelligenceIt is now close to three years since Clearstream went live with its AI-based collateral agreement application Own Selection Criteria with Automated Reasoning (OSCAR).OSCAR is now supporting over 50 clients and is being used to support hundreds of collateral schedules across this client base. This is centrally integrated into Clearstream’s collateral management service offering, such that the CCMS ecosystem in Canada has gone live with OSCAR embedded from live date. “This is an important step forward,” says Szigeti. “Previously, it would take days or even weeks to get a collateral schedule in place, relying heavily on manual inputs which then had to be approved by relevant divisions.”Clearstream expects to introduce upgrades to OSCAR during 2026, such that as users work with progressively more complex collateral sets, this can be managed in a straight-through-processing (STP)-environment without the need for manual inputs and interventions.DLT-enabled collateral mobilizationIn January 2025, Eurex Clearing received regulatory consent from BaFin, the German regulator, to offer DLT-supported collateral mobilization to its clients, enabling securities collateral to be mobilized instantly to meet CCP margin requirements, regardless of its location. This initiative is based on a collaboration between HQLAX and Clearstream, with J.P. Morgan active as a pilot clearing member.Deutsche Börse Group’s D7 platform currently supports close to Euro 58 billion in natively issued digital securities. In early November, Clearstream added a solution for tokenized securities (D7 DLT) to this platform, offering choice to the client regarding whether they opt for digital or tokenized issuance.Through its collaboration with HQLAX, Gast suggests that Eurex Repo has continued to make strong progress in developing digital repo solutions, enabling digital securities cash baskets and digital cash solutions. “Successful tests of intraday DvP GBP repo with HQLAX and participation in the ECB’s DLT settlement trials, demonstrate the potential for centrally cleared intraday repo transactions using distributed ledger technology,” concludes Gast. “These initiatives are paving the way for a more efficient, resilient, and innovative market infrastructure.”The article was first published on Securities Finance Times on 15 December 2025Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit Weiter zum vollständigen Artikel bei Deutsche Boerse AG Unsponsored American Deposit