Euroclear, the post-trade and settlement services provider with over €675 trillion worth of securities transactions cleared in 2015 and holding over €27 trillion in client assets, announced plans with French fund manager Lyxor Asset Management to launch e-Data Liquidity – a new tool that will allow fixed-income investors to check the liquidity of their assets, according to a joint company statement.
Lyxor Group has €115.5 billion in Assets under Management (AuM) as of the end of March 2016 through its entities in France that are approved by the local regulator the Autorite de Marches Financiers (AMF), and the group is a fully-owned subsidiary of Societe Generale Group. The French mananager teamed up with Euroclear to help create the first version of the product, aimed to help investors price fixed-income securities.
This first module, designed in close collaboration with Lyxor, focuses on supporting the management of fixed income and more specifically high quality liquid assets.
Aimed to help price assets
The launch of e-Data Liquidity will provide fixed-income investors with an innovative tool to evaluate the liquidity of their assets, including the intrinsic value of related securities which can be hard to determine in certain cases such as when there is an intermittent lack of volume in a particular instrument.
Launching this solution was highlighted alongside the increasing need for accurate monitoring amid regulatory requirements and the need for investors to allocate their funds with available tools that could help better price assets such as during market events or volatility and therefore help improve price transparency.
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OTC fixed income challenges
Stephan Pouyat
Source: LinkedIn
The announcement further detailed that in over-the-counter (OTC) markets, where fixed income securities mainly operate, there is less transparency adding to the potential opaqueness over pricing that can arise.
Commenting on the announced collaboration for the new solution, Stephan Pouyat, Global Head of Funds and Capital Markets at Euroclear, added: “The current market climate is prompting investment managers, treasurers, risk managers, insurers, collateral takers, central counterparties and other buy-side institutions to better manage their asset portfolios and strengthen their balance sheets, including liquidity buffers.
Fund manager-aided synergy
Mr. Pouyat added: "e-Data is a modular tool and the liquidity module provides key indicators founded on our neutral settlement data and presented in its simplest form, relying on the infrastructure stamp of Euroclear. This first module, designed in close collaboration with Lyxor, focuses on supporting the management of fixed income and more specifically high quality liquid assets.”
Lyxor Asset Management’s Co-Head of Sovereign Bonds Investments, Jean Sayegh, said: “Lyxor has always helped its clients understand and adjust to a rapidly changing environment. By teaming up with Euroclear we are participating in the current regulatory drive for market transparency and providing fixed income investors with an innovative tool helping them better manage their portfolios. This partnership confirms our expertise as an innovative and growing fixed income asset manager. By utilising the depth of Euroclear data, Lyxor creates value for its clients”.
