Peer-to-peer collateral platform Elixium executes first trade

Peer-to-peer collateral platform Elixium executes first trade

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A new platform offering peer-to-peer trading of collateral for banks, institutional investors, brokers and hedge funds executed its first trade this week.

Elixium, which describes itself as a regulated multilateral trading facility (MTF) for collateral and secured deposits, said Citibank, as cash management agent, executed on behalf of CME Clearing Europe, while Insight Investment executed on behalf of a UK pension fund.

The platform is designed to address the impact of regulation, balance sheet pressures, and deteriorating levels of liquidity in the repo market by providing participants with collateralised liquidity fairly and transparently.

Clients can gain access to high-quality liquid assets that can be traded as collateral, on an all to all basis, and supports pre-trade bi-lateral anonymity.

CME Clearing Europe is the first central counterparty (CCP) to trade collateral on the platform.

Elixium is owned by Tradition,the interdealer broking arm of Compagnie Financière Tradition. 

Rival DBV-x is also opening a central collateral exchange for market participants this year with the backing of BNY Mellon. 

"Due to a historical lack of direct counterparty access for non-bank participants, a trade between a CCP and an asset manager or pension fund would have previously been highly inefficient and costly to facilitate,” said Nick McCall, Elixium’s chief executive.

“The completion of our first trade demonstrates the rate of change in the repo market and the benefits of facilitating electronic all-to-all collateral trading in a regulated environment.”

Tina Hasenpusch, chief executive of CME Clearing Europe, added: “CME Clearing Europe will use this platform as part of our commitment to working with the buy- side to manage their liquidity challenges, including the requirement to generate cash for variation margin. 

"Peer-to-peer solutions will help meet those challenges and the need to ensure that CME Clearing Europe has access to a diverse set of repo counterparties.” 

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