BNY Mellon's so-called tri-party centralized collateral management platform now accepts Chinese bonds as collateral, using Hong Kong's Bond Connect program.
BNY Mellon's bond connect solution allows clients in China's $13.9 trillion government bond market to use their holdings as eligible collateral on the tri-party platform to support financing, lending and other activities, Greig Ramsay, BNY Mellon's APAC product strategy manager, clearance and collateral management, said in an email.
The tri-party platform — which outsources to BNY Mellon many of the collateral management processes that underpin financial transactions — offers scope to efficiently centralize how clients manage collateral for activities such as repurchase agreements, securities lending and margin segregation, Mr. Ramsay said.
Once Chinese government bond assets are within the tri-party platform, "clients can mobilize and optimize the securities as collateral in transactions with counterparties across the globe," BNY Mellon said in news release.
BNY Mellon's latest move comes roughly three years after it began utilizing the Stock Connect program to allow institutional clients outside of mainland China to collateralize A-shares traded in Shanghai and Shenzhen.
