FRONTIER CLEARING CORPORATION B.V. (FMO-50742)

Regions
  • World
Where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
C
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Feb 13, 2017
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Frontclear
The holder of the loan, grant, or other investment.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Ring Fence
  • No Restrictions
A financial intermediary is a commercial bank or financial institution that receives funds from a development bank, sometimes for a specific lending purpose. A "ring fence" is another name for this specific purpose. These funds are then used for lending by the financial intermediary to client companies or individuals.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 30.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Loan Amount (USD)
$ 30.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ FMO website

Updated in EWS Jun 26, 2018


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Project Description

According to FMO website, Frontclear is a financial markets development company focused on catalyzing more stable and inclusive financial markets in emerging and developing countries. Frontclear facilitates more competitive access to interbank markets though issuance of Basel III compliant credit guarantees to cover a transacting institution’s (the Obligor) counterparty credit risk. Frontclear covers money market instruments including but not limited to repo’s, cross currency repo’s and derivative instruments. The investment represents a significant increase in the capital of Frontclear and allows Frontclear to extend its efforts to support the development of more inclusive and more liquid interbank markets in emerging and frontier economies. Frontclear is a niche-player with a unique proposition. Given the company’s start-up nature, FMO is highly additional. Further value is added by enabling Frontlcear to access FMO’s network and knowledge such as FMO’s worldwide financial institution sector knowledge and client base. Frontclear’s product offering is complementary to FMO since it is highly beneficial to many of our financial institutions clients: whereas DFIs provide long-term financing, Frontclear offers short – term money market solutions. Finally, Dutch interest is clearly represented in this transaction.

Investment Description
  • Netherlands Development Finance Company (FMO)
Financial Intermediary
A financial intermediary is a commercial bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds.
Private Actor Relationship

There is often limited information publicly available about what development banks are funding through financial intermediaries. In 2021, the Early Warning System partnered with Oxfam International to incorporate information on high-risk projects being funded by financial intermediaries financed by the International Finance Corporation (IFC) and the Dutch Development Bank (FMO).

The relationships listed below contain information about the high-risk subprojects of IFC and FMO's financial intermediary investments made from 2017 through 2020, and any associated ring fences.

The database does not explicitly or implicitly imply that IFC or FMO have material exposure to or are contractually or legally accountable to the sub-projects financed by their financial intermediaries.

For more information, please review our Methodology.

Contact Information

No contact information provided at the time of disclosure.

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW) . A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism