Treasury management advisor Arlingclose has launched a secured deposit service for local authorities, which provides councils with access to the wholesale repurchase agreement (repo) market.
Arlingclose has launched the service in collaboration with securities lending-specialised fintech Consort1, along with Clearstream, Standard Chartered Bank, NatWest, Alpha Group and BankClarity.
The new service provides local authorities, corporates, fund managers and other institutions with access to the repo market. Gloucestershire County Council is among the first UK local authorities to utilise the secured deposit service.
Arlingclose stated that the new service provides more opportunities for institutions such as councils to diversify their investment portfolios, lower the risk profile of cash deposits, continue to work with mainstream banks across the usual tenors, and potentially earn higher returns on their cash.
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David Green, director of Arlingclose, said: “We are delighted to have successfully launched the secured deposit service for local authorities alongside our industry partners.
“Our clients have over £10bn of public money invested, so it is a significant advance that they can now substantially lower the credit risk on their bank deposits without conceding the return, flexibility or administrative simplicity they are used to.”
Arlingclose’s partner Consort1 is the coordinator and facilitator of the new service, having implemented tri-party trading contracts on behalf of clients to allow for a simple cash deposit placed with the client’s chosen bank to be fully collateralised for the duration of the deposit.
Justin Clapham, co-founder and CEO of Consort1, commented: “We are proud and honoured to be working with Arlingclose to bring the repo and collateralised secured deposit service to local authorities that have not been able to access this before.”
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