04.25.2014
By Terry Flanagan

Clearstream Ready for American Expansion

Arnaud Delestienne, head of core product management at Clearstream, said the international central securities depository has finished testing as it prepares to extend settlement hours in North and South America next week.

From Monday, Clearstream, which is owned by German exchange operator Deutsche Börse, is extending its settlement period in the US, Canada, Mexico, Argentina and Brazil by two hours to 14:00 EST.

Delestienne told Markets Media: “On the 28 April we will provide extended settlement services both internally and across our links to North and Latin American markets, so our clients can transact later in the day using the Clearstream system to transfer securities. We are improving access to the most liquid market in the world and creating a much more attractive global liquidity pool.”

He added that growth prospects in South America are particularly important so Clearstream needs to provide the region with the right tools.

The extra two hours are the first phase towards enabling settlement throughout the entire US business day by 2016. From next week Clearstream will cut the processing time for their end of day files while later phases phase will involve technology upgrades and then a redesign and changes to our interoperability with external providers.

“The launch is part of a long-term product roadmap to build a global liquidity hub and is as important as the extension in Asia-Pacific which we did in 2009,” added Delestienne. “We aim for the full solution to be available in the US by the end of 2016. Through this first phase, we are adding two hours and we are eager to see how the market responds.”

Delestienne declined to comment on how whether added volumes from the US extension are likely to match increased business from extending Asian settlement hours.

“We will target success through a variety of variables including the level of deposits and turnover in North and South American markets, the level of turnover within our own books leveraging our suite of securities financing services, and new business from North and South American clients,” he said.

This week, Clearstream also said in a statement that it had agreed to buy Citco’s financial nstitution hedge fund custody processing business for a sum in the mid double digit million euro range.

The acquisition of adds around 300 Citco Global Securities Services’ CGSS employees based in Irleand to Clearstream and licences Clearstream to use Citco’s custody IT infrastructure.

Philippe Seyll, member of the executive board and head of investment funds services at Clearstream, said in a statement: “The know-how and expertise in hedge funds operations we acquire from Citco combined with our operational excellence in mutual funds will enable our Vestima platform to become the leading international fund market infrastructure for all types of funds.”

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