Euroclear has launched a US Treasury delivery-versus-payment (DVP) repo service, aiming to improve efficiency and cost optimisation in the space.
The service allows cash lenders to execute DVP repo transactions with the same level of efficiency as triparty repo transactions, Euroclear said. Both cleared and non-cleared DVP repo can be administered by cash lenders through the service, providing a scalable solution, the company said.
This is pertinent given the upcoming US Treasury Clearing Mandate, which requires certain Treasury cash purchases, sales, and repo transactions to be centrally cleared. The first phase of this initiative goes live in December 2025, and the second in June 2026.
Settlement is completed through FedWire Securities Services, with repo collateral is held in a segregated account by a custodian of the cash lender’s choice. With the ability for venues to integrate their trading workflows into the system, collateral can then be more easily allocated by lenders and counterparties. Voice-only and voice-assisted trades can also be executed on the platform.
Initially available for US Treasury repo market participants both operating in the US and settling in USD, Euroclear expects to introduce the service to other markets and currencies later on.
Oliver Grimonpont, global head of market liquidity at Euroclear, commented: “The service was developed with significant input from market participants and their custodians, and will deliver the improved financial returns and diversification that these market participants seek.”
The platform’s first trade was completed on 6 February, between Euroclear Bank and Toronto Dominion Bank London.
Euroclear has collaborated with fintech solutions provider Matrix Applications on the project, using its TradeBlazer technology to support collateral management compliance and repo trade lifecycle events, including securities settlements, margining and securities substitutions. Data integration and custodian communications are provided by BBH Infomediary Data Solutions.
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