Commerzbank and Clearstream have formed a strategic partnership to launch TradeCycle, described as the first integrated service of its kind for over the counter (OTC) derivative trade lifecycle.
The new service will be launched in Q413 and will provide clients access to an integrated management solution for the OTC derivative trade lifecycle: from trading to clearing, settlement and custody, including key services such as advisory, valuation, and collateral management.
The partners said that market participants will benefit from an end-to-end solution for the handling of OTC derivatives which will allow them to minimise operational inefficiencies, funding costs, enhance yield and improve their risk management as well as being prepared for future regulatory requirements such as the European Market Infrastructure Regulation (EMIR) or the Market in Financial Instruments Directive and Regulation (MiFID/MiFIR).
“Derivatives trading and market infrastructures have been brought to the forefront of regulatory attention and regulators have set in motion mandatory requirements which financial institutions and corporates will have to meet,” they added.
“As the market becomes more fragmented, it is not uncommon for clients to engage with a large number of banks and vendors to complete one single transaction, leading to increased costs and inefficiencies. TradeCycle will simplify this process for clients by managing all their OTC derivatives trades across the entire value chain from one single point of access.”
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