BNP Paribas provides networked access to custody, settlement and clearing services.
Mid-sized buy-side institutions are seeking access to post-trade services in multiple locations without having to build direct connections.
BNP Paribas has launched a service providing a single point of contact for settlement, clearing and custody, which combines the flexibility of local accounts within a global solution.
“Major investment banks for a long time have had direct access to local clearing and custody services by maintaining massive back offices, some of them offshore,” Julien Kasparian, UK head of sales, financial intermediaries at BNP Paribas, told Markets Media.
Smaller-sized institutions have outsourced their back offices, he added.
The new service, which is aimed at mid-sized institutions, is a hybrid in which the client retains its own back office operations but BNP Paribas manages the connections.
Establishing proximity in new markets is key to financial intermediaries wanting to grow trading activities. Yet building the requisite critical mass introduces rising settlement and custody costs by complicating cash management and onboarding requirements, and the added costs of working with local agents in each market.
“Midsized institutions don’t want to be bothered with building multiple connections,” said Kasparian. “With this new service, medium-sized financial intermediaries can enjoy the same kind of access to local services as Tier Ones.”
The service incorporates collateral management, which improves clients’ liquidity and capital usage, he said.
The service is designed to deliver global reach with local expertise in each market, BNP Paribas said.
The platform’s open architecture enables it to interface with client accounts held with international central securities depositories (ICSDs) or their subagents. It also benefits from automatic cross-border to reduce the number of trade failures.