Dutch pension fund PGGM is in the process of completing its admission as a direct participant of Eurex Clearing’s Securities Lending central counterparty (CCP).
Morgan Stanley and PGGM are in the final stages of testing to become the first to use the EquiLend Clearing Services connectivity to access Eurex Clearing’s CCP, which will allow them to transmit trades agreed via EquiLend to the CCP.
“It is a significant achievement to announce PGGM’s deployment of Eurex Clearing’s Lending CCP,” said Eric Mueller, CEO of Eurex Clearing.
“The focus on CCP solutions continues to increase, driven by the need for cost and operational efficiencies and we anticipate greater utilisation of our services as the securities finance industry looks to realise the added benefits of a CCP model.”
Investment manager for treasury trading and commodities at PGGM, Roelof van der Struik, added that the firm’s strategic initiative with Eurex Clearing has come to fruition with the help of Morgan Stanley and EquiLend.
“The accompanying effort by BNY Mellon as global custodian and by Euroclear as tri-party collateral agent, have additionally contributed to this innovative approach that helps deliver cost and operational efficiencies for our securities lending activities,” he added.
Eurex Clearing’s securities lending CCP aims to reduce counterparty risk exposure and remove the need for multiple credit evaluations for loans in global fixed income securities, equities and exchange traded funds (ETFs).
“We are very pleased that PGGM and Morgan Stanley are in the final stages of completing the admission and simulation testing in order to start transacting by utilising EquiLend to access our Lending CCP offering,” said Marcel Naas, global head of funding & financing at Eurex’s parent company Deutsche Börse Group.
“The acceptance and growth of the Lending CCP is proven by the committed partnership shown by our clients and leading market infrastructure providers.”