Case study: Gateway Credit Union
Austraclear and Repo
There are currently over 100 Credit Unions and Building Societies in Australia who are taking deposits and lending on a daily basis. To safeguard a Credit Union’s liquidity, the Reserve Bank will allow Credit Unions to repo back a list of “Eligible Securities” and the process will be regulated and governed by APRA and corporations law.
Challenge
With increasing market volatility and global concerns on liquidity availability, APRA have been actively promoting to Credit Unions, the use of Reserve Bank of Australia (RBA) repo facility that enables Credit Unions to repo “eligible” securities back to the RBA in exchange for cash. This facility provides financial surety to a segment of the market that has had little or no liquidity back up framework previously.
Task
The RBA also stipulates the repo transactions must be completed via Austraclear. This is where Oakvale Treasury is currently helping Gateway Credit Union who has engaged the treasury operations service of Oakvale to facilitate their repo activity via a proxy. The use of this service has had the added benefit of improving the treasury operational processes with investments, including term deposits and discount securities, by holding and settling them through Austraclear.
Solution
The benefits to Gateway Credit Union were immediate and numerous. These include:
- Substantial cost savings, as Austraclear’s connectivity fee is not required, over $4,000 per annum, covering a substantial portion of Oakvale’s fee
- Reporting is done by Oakvale, saving considerable processing time
- Mitigation of settlement risk
- Human resource cost saving
- Training, business continuity planning and system updates are managed by Oakvale.
Oakvale Treasury also fulfills compliance requirements with segregation of duties, across to knowledgeable staff and the facilitation of real time gross settlement (RTGS).
Peter Gilmore, CFO of Gateway Credit Union is more than happy with Oakvale’s Austraclear service, “I can sleep soundly at night knowing my settlement and operational risk is fully mitigated by Oakvale. I also don’t have to worry about staff being sick or on holiday leave. Oakvale gives Gateway Credit Union total peace of mind that this important function is being covered 24/7″.
Contact Oakvale Treasury today to learn more about how we can improve the efficiency and accuracy of your trades with our Austraclear support service.