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Industry roundup: 22 April

Citi integrates Mastercard Send to expand payment exchange capabilities for US clients

Citi’s Treasury and Trade Solutions (TTS) has announced that it has expanded payment options for the bank's Payment Exchange institutional clients through the integration of Mastercard Send. Citi’s corporate and public sector clients in the US can now leverage Mastercard Send to send funds directly to a consumer debit or prepaid card account.

Citi Payment Exchange provides the bank's commercial clients with the ability to send business-to-consumer (B2C) payments via their customers’ preferred method of payment. It also incorporates payee enrolment services, a payee database, online payment preference management, an administrative platform, dedicated support, bank-grade data security and storage all in one.

By leveraging various electronic payment options, including ACH and now near real-time payments to debit and prepaid card accounts, the bank says that organisations can simplify and help reduce payment costs while providing an exceptional and brand building user experience for their clients.

In the US, Mastercard Send reaches virtually all consumer and small business debit cards. Consumers won’t need to receive a cheque in the mail, deposit a cheque, or share sensitive bank routing information. In addition, they can benefit from near immediate access to funds. The expanded Citi Payment Exchange capabilities are available now to corporate and public sector clients in the US.


ARRC announces key principles for a forward-looking SOFR term rate

The Alternative Reference Rates Committee (ARRC) has announced key principles for an ARRC-recommended forward-looking Secured Overnight Financing Rate (SOFR) term rate in order to help guide the ARRC as it considers the conditions it believes are necessary to recommend a SOFR term rate. These principles build on the ARRC’s update from 23 March and ongoing ARRC discussions, and will inform the ARRC’s continued consideration of a SOFR-based term rate. As announced in the March statement, the ARRC will continue to work quickly to communicate what it considers to be the necessary conditions to substantiate the recommendation of a SOFR term rate, including the development of sufficient liquidity in SOFR derivatives markets and recommendations for an appropriate scope of use for the term rate.

Given US supervisory guidance, the ARRC encourages market participants not to wait for a term rate and to make use of current SOFR conventions available now. However, the ARRC has long recognised that a forward-looking SOFR term rate may be a supporting tool for certain uses in the transition, and has recommended a number of actions aimed at building liquidity in SOFR derivatives that would help to ensure the robustness of any recommended term rate. In working to set out what it considers to be necessary conditions and the recommended scope of use, the ARRC is seeking to provide greater clarity to allow market participants to judge the likelihood and potential timing of a recommended term rate for certain uses.

The key principles for an ARRC-recommended forward-looking SOFR term rate, are that this rate should:

  • Meet the ARRC’s criteria for alternative reference rates, similar to SOFR itself.
  • Be rooted in a robust and sustainable base of derivatives transactions over time, to ensure that its use as a reference rate is consistent with best practices and the ARRC’s own standards.
  • Have a limited scope of use, to avoid (i) use that is not in proportion to the depth and transactions in the underlying derivatives market or (ii) use that materially detracts from volumes in the underlying SOFR-linked derivatives transactions that are relied upon to construct a term rate, making the term rate itself unstable over time.


BNP Paribas executes first-ever BRL interest rate swap on Tradeweb

BNP Paribas has executed the first-ever Brazilian real interest rate swap on Tradeweb in April.

The bank says that this trade, coming after similar firsts on Asian and Latin American currencies last year - with SGD, HKD and MXN interest rate swaps executed by BNP Paribas on Tradeweb in 2020 - highlights its continued commitment to drive digitalisation and grow the bank's electronic emerging markets footprint.

"This pioneering BRL trade is the latest of many electronic firsts for BNP Paribas in emerging markets as we remain committed to driving innovation in LatAm, providing our clients both first rate service and liquidity," said Renato Theodoro, head of Trading FX, Local Markets and Commodities, Americas at BNP Paribas.


Central Bank of Iceland partners with SkySparc for TMS support

SkySparc, an independent solutions provider, has entered into a multi-year partnership agreement with the Central Bank of Iceland covering use of outsourced support services and OmniFi, SkySparc’s proprietary data integration and workflow automation solution.

Although the Central Bank of Iceland has used SkySparc’s services since 2018, the new agreement represents a formalisation of the relationship. Under the agreement, SkySparc will provide structured ongoing support services to optimise use of the bank’s treasury management system at least up to 2025.

In addition, SkySparc has licensed use of OmniFi across the bank’s treasury operations, having worked with internal teams to identify a number of use cases, including for test automation and data warehouse projects. The agreement includes an annual upgrade of OmniFi.

"Having worked closely with the Central Bank of Iceland in recent years, SkySparc welcomes this opportunity to extend our business and technical relationship," commented Lars Schröder, senior engagement manager at SkySparc. "With SkySparc’s support in developing and improving its treasury system processes, this new arrangement provides the bank with long-term reassurance, empowering treasury operations staff to plan with confidence."

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