Cash & Liquidity Management
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Tri-Party Repo: Futureproofing Risk and Cost for Corporate Treasurers


“Tri-Party repos are becoming an increasingly more attractive mechanism for corporates to replace cash deposits to mitigate against credit counterparty risk. However, this concept needs to be sold to management.”

This was the common theme noted by over 80% of delegates in two separate conferences held during 2015 by Strate, in conjunction with ACTSA, and Strate’s global Tri-Party collateral partner, Clearstream Banking SA (a subsidiary of the Deutsche Börse Group).

In South Africa, only 25% of corporates have, at some point, used repos with counterparts.

Under Basel III regulations, banks receive a capital benefit by placing collateral against short-term deposits from a corporate counterpart rather than on an unsecured basis. Moreover, under Tri-Party repo arrangements, cash deposits will no longer have to be spread across multiple banks to mitigate credit counterparty risk, as larger deposits can now be placed with a single bank – secured by non-cash collateral.