Thomas Book, member, Eurex Executive Board
"We have completed testing of our offering and are ready to start a pilot phase with our early adopters."
Eurex Clearing has announced that it will go live with Europe's first central counterparty (CCP) service for the bilateral securities lending market on 22 November.
Eurex Clearing's lending CCP will commence operations with an initial group of banks and asset classes; German and Swiss blue chip equities and Exchange Traded Funds (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 and test the infrastructure to access the CCP offering. The product scope will then be extended to include additional European markets for loans in equities, fixed income products (such as European government bonds, corporate and covered bonds) and further ETFs.
For the market introduction, Eurex Clearing has partnered with securities lending and collateral management specialists. Eurex Clearing's lending CCP will combine the trading capabilities of Eurex Repo's SecLend Market and Pirum System's 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.
"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. We have completed testing of our offering and are ready to start a pilot phase with our early adopters," said Thomas Book, member of the Eurex Executive Board and responsible for clearing. "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."