Fouad Estephan
Euroclear Collateral Conference
Tuesday, 13 May 2014

OIS value proposition agents
CSDs custodians
CCPs central banks banks
Collateral
Transformation
Optimise the management of your domestic inventory
• efficiently pool your domestic collateral resources to be used in triparty
• maximise financing of domestic assets in triparty without impacting settlement and custody in the domestic markets
• reduce operational burden of managing domestic inventory to be used in triparty
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Current markets and roll-out
Belgium
Netherland
Germany
UK Italy
Euroclear Bank
Triparty
France Singapore
USA Japan
Spain Hong Kong
Covering Equities and Fixed Income securities
Active
Q4-2014
Q1-2015
2015-16
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Automated inventory management
Agent
Client
②
EB
ISO messages & reports
①
Open Inventory Sourcing
EB ICSD
Client /
Giver
③
Taker
Fully automated and dynamic inventory management service:
1.
Calculate your available positions in each market that you are subscribed for based on reporting received from your agent
2.
generate automatically matching settlement instructions that transfer the securities from your domestic account to your Euroclear Bank account
3.
combine OIS with the powerful optimisation feature in triparty

Consolidating fragmented pools for optimisation
Open Inventory Sourcing
Domestic markets
Client@Italy
Client@Spain
Client@UK
Client@France
Client@Germany
Client@USA
Client@Japan
Collateral Management & Optimisation
EB ICSD
Bank 1
Client@EB
Repo – Set1
Repo – Set 2 CCP1
Pool of securities collateral
Repo – Set 3
Liquidity – Set 4
Asset
Manager
Central
Bank
Derivatives – Set 5 CCP2
Fixed Income
&
Equities
Sec. Lending – Set n
Lender
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Granular selection of your domestic securities
Available criteria
Set-up – granular OIS eligibility criteria:
• Rating
• Indices
• Instrument nature (debt, equity)
• Instrument category (bond, bill, note,...)
• Issuer type (sovereign, supranational, corporate,…)
• Issuer country
• Securities type (ABS,…)
Options:
• Minimum amount to be left on domestic a/c
• Maximum amount to be sourced into triparty
• Applicable to pool of securities with prioritisation features
• OIS can generate FoP or DvP transactions
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Priority to your activity on the domestic market
Automatic processes
Integrated systems ensure your domestic needs are always fulfilled
• In each OIS run, securities required for settlement on the domestic market are:
► excluded from the pool of available securities, and / or
► delivered back from your EB account to your domestic account if already used in triparty
• Securities in excess (not needed for domestic settlement or corporate actions) are moved from your domestic account to your EB account within the limits you have defined
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Corporate Actions
Automatic processes
Integrated systems ensure your domestic needs are always fulfilled
• For Fixed Income, corporate events can be serviced by EB as currently done
• For Equities, corporate events are usually serviced by the agent. Therefore, when a
CA is detected, equities are:
► excluded from the pool of available securities, and / or
► delivered back from your EB account to your domestic account if already used in triparty
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Reconciliation
• The OIS sends external settlement instructions and matching MT
540/542 messages on your domestic account
• OIS settlement instructions are reported in standard settlement reports with specific client references
• For reconciliation purposes, you may integrate in your system those OIS specific references
Euroclear Bank e.g.
IMXI123456713012
Agent e.g.
IMDI123456713012
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Example – Spain
S-1
17:00
Market cut-off time
S
16:00
AutoSelect processes
16:30
AS
08:00
AS
10:00
AS
14:25
AS
Inventory Manager runs
16:10
16:20
IM
07:50
IM
09:50
IM
14:15
IM
15:10
15:20
IM
Recommended deadline for clients to put settlement instructions on the domestic market
Additional IM runs can be set up if needed
15:30
AS
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For internal use
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