BNY Claims Intraday Tri-Party Repo First

The Bank of New York Mellon says it has successfully piloted the first intraday repo trade settled through its triparty infrastructure.

The USD-denominated pilot transaction, actually took place in February, and saw UBS borrowing cash from Swiss Re while delivering collateral via BNY’s global collateral platform.

The bank says the pilot demonstrates the ability for market participants to instruct a same-day repo with a specified start and end time through BNY’s triparty infrastructure, whereby the allocation and return of eligible collateral is settled and matured intraday against payment. Additionally, market participants can access intraday repo through their existing triparty legal documentation on the BNY platform.

“We are continuously evolving BNY’s platform infrastructure to unlock new trading patterns for the market,” says Gesa Johannsen, executive platform owner – global collateral, BNY. “Complementing our new early morning maturity option for triparty transactions in the US, our intraday triparty repo solution is an important step towards providing more flexible liquidity management possibilities to our clients, enabling them to more efficiently fund their day-to-day operations.”

The solution enables market participants to source liquidity for specified periods of time without the need to borrow for a full 24-hour period. For lenders BNY says the solution provides an opportunity to generate additional income on excess, idle cash.

“The use of intraday funding in our industry is evolving,” says Jason Crosskey, head of EMEA funding and optimisation solutions, UBS. “This facility enhances intraday capabilities by allowing institutions to provide or access cash at specific times to better manage liquidity.”

BNY adds that in April, Banco Santander and Rabobank also successfully completed an intraday triparty repo transaction, executing trades in both directions — borrowing and lending – through the collateral platform. Settling both legs of the repo trade intraday provided the parties with enhanced flexibility, streamlined collateral management, and improved short-term funding efficiency. As triparty agent, BNY provided the infrastructure, collateral servicing, and settlement support required to enable this trade.

“There is clear appetite from market participants like Rabobank for more dynamic and efficient short-term funding solutions,” says Allan Bolk, European head – securities finance and repo, Rabobank. “Executing both sides of the transaction intraday through a triparty setup delivers valuable optionality and operational ease.”