FICC Sponsored Cleared Repo Now Available via BNY Mellon's LiquidityDirect

Rhea-AI Summary

BNY Mellon announced the addition of cleared repo to its LiquidityDirect investment platform, enhancing services for institutional clients. This move follows the platform's growth, which has seen daily volumes in the sponsored cleared repo sector rise from $30 billion in 2017 to above $200 billion recently. The cleared repo option allows clients to invest without full clearing house membership, increasing accessibility. LiquidityDirect has supported nearly $9 trillion in transactions annually as of 2020, positioning it as a leader in short-end investments.

Positive

• Addition of cleared repo expands investment options on LiquidityDirect.
• Daily volumes in sponsored cleared repo have consistently surpassed $200 billion.
• LiquidityDirect facilitated almost $9 trillion in annual transactions for over 700 clients as of 2020.

Negative

• None.

NEW YORK, April 15, 2021 /PRNewswire/ -- Institutional clients are now able to seamlessly invest cash in cleared repo through LiquidityDirect^sm, BNY Mellon's market-leading short-end investment portal.

The addition of cleared repo represents the next step in BNY Mellon's continuing plans to enhance the LiquidityDirect platform and its services to enable clients to invest in a wide variety of short-end investment products.

Cleared repo through the Fixed Income Clearing Corporation (FICC) has emerged as an important short-term investment option for liquidity providers, particularly since 2017 when changes in entry requirements increased the community of investors eligible to utilize the product, many of whom use LiquidityDirect today.

Sponsored membership enables sponsoring firms like BNY Mellon to provide cleared repo to end users that would otherwise be ineligible to access the FICC clearing house, enabling clients to invest and raise cash in cleared repo without the financial obligations of full clearing house membership.

Since BNY Mellon launched its sponsored member program at FICC in June 2017, the sponsored cleared repo sector has enjoyed strong growth, climbing from approximately $30 billion in daily volume in early 2017 to peak at over $525 billion in March 2019. Daily volumes have remained consistently above $200 billion in recent months.   

The addition of cleared repo to LiquidityDirect broadens the range of short-term investments on the platform to include a secured, centrally cleared alternative that provides counterparty diversity and potentially enhances yields.

"LiquidityDirect is one of the world's largest digital portals for investing in money market funds. With the addition of cleared repo – and with other vehicles still to come – we are demonstrating our ambition to build the venue into the market's leading short-end investment platform," says George Maganas, Head of Liquidity Services at BNY Mellon.

"Today, clients are looking for a single point of contact that both grants access to a wide variety of investment instruments as well as collateral management, treasury services and asset servicing capabilities. LiquidityDirect is that access point, and we are committed to connecting the dots for clients," Maganas concludes.      

Mark Haas, Head of Principal Securities Finance at BNY Mellon, adds: "We have attained a leading position in sponsored repo since the product was rolled out, and we see increased interest and enrollment from entities that are common users of treasury workstations such as municipalities, corporates and insurance companies. The ability to transact via LiquidityDirect is the latest in a series of cleared repo enhancements we've introduced to benefit clients, such as dynamic margining, term trading and expanding into additional jurisdictions."

Since its launch in 1997, LiquidityDirect has established itself as one of the market's leading portals for investing in all types of money market funds, including treasury funds, government funds, prime funds, taxable and tax-exempt funds, as well as offshore money funds.

As of year-end 2020, the platform supported almost $9 trillion in transaction flow annually for more than 700 of the world's largest corporations and institutional investors. Through integration into leading cash management systems such as GTreasury and Hazeltree, LiquidityDirect is embedded within clients' trading ecosystems, enabling them to seamlessly combine their treasury, back office, cash management and short-end investing activities.

ABOUT BNY MELLON
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of Dec. 31, 2020, BNY Mellon had $41.1 trillion in assets under custody and/or administration, and $2.2 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

Contact:

Peter Madigan
peter.madigan@bnymellon.com  
+1 212 815 2308

Nina Truman        
nina.truman@bnymellon.com
+1 212 815 2006

 

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SOURCE BNY Mellon

FAQ

What is the significance of cleared repo being added to BNY Mellon's LiquidityDirect platform?

The addition enhances investment options for clients, allowing access to a secured, centrally cleared alternative that offers counterparty diversity and potentially higher yields.

How much daily volume has the sponsored cleared repo sector achieved recently?

The sector has maintained daily volumes consistently above $200 billion.

What was the daily volume of the sponsored cleared repo sector in 2017?

It was approximately $30 billion in daily volume in early 2017.

How much transaction flow did LiquidityDirect support as of 2020?

LiquidityDirect supported almost $9 trillion in transaction flow annually.

What benefits does the new cleared repo option provide to institutional clients?

It allows clients to invest and raise cash in cleared repo without the financial obligations of full clearing house membership.