The Tri-Party Repo market is a large and important market, in which securities traders can use repo transactions to obtain short-term financing for a large part of their own assets and the assets of their clients. In the Tri-Party Repo market, a third party (e.g. SIX) acts as the agent, thus reducing the necessary administrative processes between the two parties carrying out the repo transaction.
Weighted average scores achieved by SIX
The collective verdict of a small number of respondents is among the best in the survey. This is especially true of “Relationship Management & Client Service”. One client provided the following written comment to this category: “Very helpful, fast response time and very good service in dealing with exceptions.”
Encouragingly for SIX, recognition of the high levels of operational support and automated processing it achieves is as strong this year as last. More than half of the respondents gave SIX a perfect score for straight-through processing.
One service area has improved more than any other: Collateral Management. As it happens, this likely reflects the growing maturity of the CO:RE multilateral multi-currency repo trading facility and collateral management platform unveiled by SIX two years ago. “The scores suggest clients are now discovering value in tools to monitor haircuts, create baskets of securities, and initiate trades only after automated checks confirm eligible collateral or cash is in place,” says Nerin Demir, Head Securities Finance & Data Services, Securities & Exchanges, SIX.
Nikola Todorovic, Head Sales Repo, Securities & Exchanges, SIX: “We are most grateful to the clients who took the time and trouble to complete the questionnaire. This survey is important to SIX to feel the pulse of our clients and to compare ourselves with the market. With the results received from this year’s survey, we are in a position to review our tools and services for an improved client experience.”
In the pipeline: Future Tri-Party Agent (FTPA)
After the successful launch of its CO:RE trading platform for repo and other securities financing transactions in March 2016, SIX is now revolutionizing its decades-old, traditional Tri-Party Agent model – by opening up its infrastructure. With Future Tri-Party Agent (FTPA) from SIX and the integrated Collateral Cockpit, securities traders will in future be able to manage their assets in one place, in one system – irrespective of with which CSD they are held. With FTPA, SIX is the first company to offer such a solution in the European market, thus providing efficiency gains and cost reductions for its clients.
The 2018 Tri-Party Securities Financing Survey asked respondents to address 24 questions divided between four service areas: (1) Relationship Management & Client Service, (2) Operations, Technology & Reporting, (3) Collateral Management, and (4) Product Capability. 97 completed questionnaires were received on behalf of five tri-party agents, of which four received at least ten responses, which is the minimum number required to assess an agent adequately enough to publish their average scores.