SecLend, the securities lending and borrowing settlement and support service launched by Swiss ICSD SIS SegaIntersettle (SIS) in conjunction with Eurex in September last year, has nine clients live or poised to go live. The first UK-based counterparty a securities borrower hooked up to the service last month.
The SecLend pool of assets available to borrow is currently valued at US$ 150 billion. With the live connection of the first London-based borrower, SIS reckons it is getting closer to its goal of providing Europe-wide coverage of the securities lending markets.
“We are aiming to sell the service to borrowers in the London area, borrowers and lenders in continental Europe and lenders in Switzerland, says Dr Robert Rickenbacher, CEO of SIS. I am convinced that the number of clients will keep on rising.”
The SecLend service offers automated electronic lending and borrowing of securities plus integrated settlement and loan and collateral management, in a tri-party service package akin to that provided by rival CSDs Euroclear and Clearstream.
Loans are transacted first over the trading platform of Eurex and then processed via SISs settlement system. SIS then administers the loan for its duration, which can be for an unspecified time, including collection and payment of commission and management of the collateral provided to secure the loan. SIS argues that the “delivery versus delivery” (DVD) functionality of SecLend is proving especially attractive in the context of the forthcoming Basel II capital adequacy regime.