Clearstream has formed a new industry consortium with the aim to resolve operational inefficiencies that exist within the international bond market.
The consortium is made up of investment banks, bond issuers, data vendors, numbering agents, central securities depositories (CSDs) and asset managers,
Its objective will be to reduce operational risks and time delays when issuing bonds, and to tackle the challenges that occur when converting between structures in the secondary market.
Clearstream said in a statement that the added benefits will increase bond market liquidity, as well as reduce transaction costs and reputational risks for the participants who are affected.
“It’s long been known that processing transactions between regulation formats is time consuming and tests the integrity and liquidity of the bond market. We at Clearstream have seeded a collaborative and innovative environment for the bond market to grow into its future state. We all need to work together to encourage industry change at this difficult time,” said Adrian Dacruz, vice president of strategic market development at Cleastream and founder of the new consortium.
The consortium is the latest industry initiative that Clearstream has been involved in. Last year, the market infrastructure participated in a $20.5 million fundraising project with the likes of BNY Mellon, Deutsche Bank, HSBC, JP Morgan and State Street, in digital proxy voting platform Proxymity.
Clearstream has also teamed with Credit Suisse Asset Management, Natixis Asset Management and the Luxembourg Stock Exchange to launch FundsDLT, a decentralised technology platform for the distribution of funds.