The first CCP for the bilateral securities lending market will launch on Nov. 22 2012.
Eurex Clearings lending CCP will commence operations with an initial group of banks and asset classes; at the start, German and Swiss blue chip equities and ETFs will be available for pilot clients. This initial phase will allow clearing members to lay the necessary foundations for the alignment of their systems and processes with the CCP offering.
The service is intended to mitigate counterparty risk and increase capital efficiency. It will also leverage Eurexs partners for trading and collateral management, by combining the trading capabilities of Eurex Repos SecLend Market and Pirum Systems Real-Time service for bilaterally agreed OTC transactions with the tri-party collateral management services of Clearstream Banking Luxembourg and Euroclear Bank. The service also meets regulatory requirements such as Basel III, CRD IV and IOSCO proposals.
Following the initial phase, the CCP product scope will be extended to include additional European markets for loans in equities, fixed income products (such asEuropean government bonds, corporate and covered bonds) and further ETFs.
Our new clearing offering for securities lending has been designed with support from key market participants who have committed to utilize the service to achieve a substantial reduction in capital allocation, said Thomas Book, member of the Eurex Executive Board and responsible for clearing.
Book confirmed Europe has completed testing of its offering and is ready to start a pilot phase with its early adopters. Our set-up will enable customers to make use of their existing connectivity to these dynamic service providers for trade and collateral management and to take the benefit of substantial improvements to the current market structure by delivering significant capital and operational benefits to all participants, said Book.
(JDC)