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ICSDs
Clearstream
Clearstream eclipses its rival in all but four areas. The scores
have a Manichean quality – less than one in six generates an
indifferent score – that drives the average towards the mean.
The exceptions are pricing (where respondents find virtually
nothing to reward) and compliance (which they find faultless).
Clearstream shares with every provider declining client confi-
dence in the competitiveness and transparency of cash and FX,
and demands for choice, but it would expect to do better on col-
lateral management. “Credit risk department decisions make no
sense,” says a client. “It looks like even being over-collateralised
means nothing.” Clearstream can afford to ignore continuing is-
sues in asset servicing (settlement and income collection apart)
because nobody is doing better. More worrying, and concealed
by respectable averages, is the lack of evidence in client service
and relationship management that Clearstream people have
retained their hold on the affections of their clients. “Strong
decrease of the service” as one respondent puts it.
Euroclear
“We have an excellent relationship with Euroclear, working
closely together as if we are part of the same team,” writes a
sub-custodian bank. Certainly, Euroclear has much in common
with sub-custodians: Clients who want better asset servicing;
more choice and disclosure in treasury services; and who believe
their assets are safe and their trades will settle. Euroclear will
not be dismayed by this or by the fact its clients believe it is
expensive.
What warrants analysis is the under-performance in cash and
collateral (“They do not help much with liquidity”) and the
mixed messages from client service and relationship manage-
ment. One respondent name-checks his current RMs (“always
approachable and willing to help in any way they can”) but says
service has taken a “decided dip” since his (also name-checked)
CSO left. “The current team do not seem to go to the same
lengths to help,” he writes.
SIX
SIX outscores its rivals in every area. In only three does it slip
below excellence. One is pricing, despite the fact SIX cut its
prices in July, when the survey was live. SIX cannot escape the
survey-wide censure in cash and FX (though it does not even of-
fer money market services) and asset servicing. It is countering
with new services that enrich client trade with SSIs to automate
settlement instructions; xChain, a crowd-sourcing search for the
elusive “golden source” in corporate actions; and automated tax
relief-at-source and reclaims, plus country-specific tax report-
ing. SIX cannot be accused of being un-innovative.
An IBM Watson-driven Security Operations Centre (SOC) will
boost its reputation – evident here – in cyber-security. The SIX
Digital Exchange (SDX), announced this summer, will trade,
clear and settle tokenised assets. SIX is ambitious as well as
innovative. It is not seeking an EU licence to operate, but it has
switched its domestic status from a bank to CSD, and plans to
compete in Europe as a third country CSD.
WEIGHTED AVERAGE SCORES
Market Average Global Average
6.22 5.33 5.20
5.75 6.21 5.75 5.40
5.31 6.30 5.41 5.44
5.88 6.08 6.17 6.01 5.68
5.76 5.27 6.70 5.61 5.46
Liquidity management 5.27 4.96 6.48 5.21 4.89
Regulation and compliance 6.37 5.69 6.02 5.95 5.64
Innovation 5.27 4.82 6.17 5.10 5.18
Asset servicing 5.27 4.93 5.88 5.12 5.09
Pricing 4.41 4.18 5.82 4.43 4.82
Technology 5.36 5.23 6.22 5.36 5.28
Cash management and FX 4.76 4.07 5.90 4.42 4.25
Total 5.42 5.14 6.21 5.36 5.24
Clearstream Euroclear Bank SIX
Market share (% of responses) 31% 33% 36%
Relationship management 5.41 5.05 Client service 5.62 Account management 5.28 Asset safety Risk management
Fall 2018
globalcustodian.com
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