Swiss Re and UBS first to successfully instruct same-day repo through BNY triparty infrastructure

Milestone demonstrates opportunity for market participants to optimize liquidity and explore untapped trading patterns

The Bank of New York Mellon Corporation, a global financial services company, has successfully piloted the first intraday repo trade settled through its triparty infrastructure. The USD-denominated pilot transaction, which took place in February, saw UBS borrowing cash from Swiss Re while delivering collateral via BNY’s global collateral platform.

The success of this pilot demonstrates the ability for market participants to instruct a same-day repo with a specified start and end time through BNY’s triparty infrastructure, whereby the allocation and return of eligible collateral is settled and matured intraday against payment. Additionally, market participants can access intraday repo through their existing triparty legal documentation on the BNY platform.

“We are continuously evolving BNY’s platform infrastructure to unlock new trading patterns for the market,” said Gesa Johannsen, Executive Platform Owner – Global Collateral, BNY. “Complementing our new early morning maturity option for triparty transactions in the U.S., our intraday triparty repo solution is an important step towards providing more flexible liquidity management possibilities to our clients, enabling them to more efficiently fund their day-to-day operations.”

Leveraging its existing collateral platform infrastructure, BNY’s intraday triparty repo solution enables market participants, like UBS, to source liquidity for specified periods of time without the need to borrow for a full 24-hour period. For lenders such as Swiss Re, the solution provides an opportunity to generate additional income on excess, idle cash.

“The use of intraday funding in our industry is evolving,” said Jason Crosskey, Head of EMEA Funding and Optimization Solutions, UBS. “This facility enhances intraday capabilities by allowing institutions to provide or access cash at specific times to better manage liquidity.”

“This is a great way to deploy any otherwise dormant intraday cash and to contribute to market liquidity,” added Richard Hochreutiner, Head of Global Collateral, Swiss Re. “Using BNY’s platform seamlessly builds on existing infrastructure and documentation.”

In April, Banco Santander and Rabobank also successfully completed an intraday triparty repo transaction, executing trades in both directions — borrowing and lending — through BNY’s collateral platform. Settling both legs of the repo trade intraday provided the parties with enhanced flexibility, streamlined collateral management, and improved short-term funding efficiency. As triparty agent, BNY provided the infrastructure, collateral servicing, and settlement support required to enable this trade.

“We are pleased to have collaborated on one of the first intraday triparty repo trades in both directions,” said Enrique Verdu, Managing Director – Securities Finance, Banco Santander. “This represents meaningful progress in how we can manage and optimize intraday liquidity.”

“There is clear appetite from market participants like Rabobank for more dynamic and efficient short-term funding solutions,” added Allan Bolk, European Head – Securities Finance and Repo, Rabobank. “Executing both sides of the transaction intraday through a triparty setup delivers valuable optionality and operational ease.”

Source: BNY