BNY Mellon and State Street in securities lending collaboration with Eurex Clearing
The collaboration will look at Expanding Eurex Clearing into the US
BNY Mellon and State Street have announced a collaboration with Eurex Clearing, the subsidiary of Deutsche Börse Group, to enhance the Eurex service to meet the needs of beneficial owners, and explore expanding its geographic reach into the US.
BNY Mellon and State Street will also provide access for their clients to Eurex Clearing’s Securities Lending CCP service.
“We are continually monitoring the regulatory and structural changes taking place in this market and view central clearing as a key additional distribution method that will help to support market demand for our clients’ securities,” said James Slater, executive vice president and BNY Mellon’s global head of securities finance. “Together with Eurex Clearing and State Street, we look forward to further enhancements to the clearing model for agent lenders and beneficial owners.”
A feature of the Securities Lending CCP is a ‘Specific Lender License’ that allows for greater participation by the buy-side by offering tiered membership, increasing the liquidity available to clients. This “preserves the special structure of the securities lending market and offers the capital efficiency and safety associated with central clearing”, it says.
Lou Maiuri, executive vice president and head of securities finance at State Street, said: “Allowing beneficial owners direct CCP access via [the] Specific Lender License provides significant benefits to market participants. We see benefits for our clients in a service that is tailored to the specific needs of the securities financing space, preserving the relationship driven business structure and at the same time delivering the capital efficiency and safety associated with central clearing. State Street looks forward to this collaboration with BNY Mellon and Eurex Clearing and other industry participants, with the joint objective to further enhance this service.”
Launched in November 2012, Eurex Clearing’s Securities Lending CCP currently covers includes equities from Belgium, France, Germany, the Netherlands and Switzerland as well as a range of international fixed-income instruments and exchange-traded funds. Six clearing members have already been admitted to the service and have cleared first transactions. Further market participants are in the admission and on-boarding process, it says.
The Securities Lending CCP service is based on Eurex Clearing’s established systems and industry leading risk management standards. Securities lending transactions from Eurex Repo’s SecLend Market or via Pirum’s CCP Gateway can be cleared by Eurex Clearing. The service is integrated currently with two tri-party collateral agents, Clearstream Banking Luxembourg and Euroclear Bank.
