NEW YORK, June 18, 2019 /PRNewswire/ -- BNY Mellon has
become the first agent lender to centrally clear a securities
lending transaction on behalf of a buy-side client through Eurex
Clearing's Lending CCP platform.
The trade, which was executed by BNY Mellon on behalf of an
insurance company client, originally faced Morgan Stanley as
counterparty, and ultimately cleared with Eurex Clearing, a central
counterparty (CCP). The trade was matched and novated through
Pirum's CCP Gateway.
This transaction represents a major new route to market for BNY
Mellon's securities lending clients who will now have the ability
to capitalize on growing market demand to undertake securities
finance within a centrally-cleared environment, but without the
obligations and responsibilities of traditional clearing house
membership.
"This trade marks a watershed in the development of the
securities lending market. Central clearing will add capacity to
the market and provide new opportunities for our clients. Those
clients who choose to participate in this new distribution channel
should see increased utilization and better pricing, all while
facing a highly-rated clearing house as counterparty," said
James Slater, Global Head of
Securities Finance, Liquidity & Segregation at BNY
Mellon.
"It has become apparent in recent years that the margin and
operational efficiencies offered by central clearing have the
potential to add huge value to the global securities finance
landscape. That's why we are so pleased that BNY Mellon has
completed their integration into Eurex Clearing's Lending CCP
platform and we welcome their first clients into the centrally
cleared construct. This is just the beginning, and we anticipate
much greater utilization of our services going forward as the
securities finance industry looks to realize the benefits of a CCP
model," said Marcel Naas, Managing
Director of Eurex Clearing's Lending CCP.
"Morgan Stanley is committed to supporting central clearing
solutions for securities finance transactions and is pleased to be
executing the first agent lender transaction on the Eurex Clearing
Lending CCP platform. This marks a significant turning point for
central clearing of securities finance transactions and adds
another execution form in the SFT optimization tool kit,'' said
Arianne Collette, Executive Director
from Bank Resource Management at Morgan Stanley.
This is the first time an agent lender has cleared a securities
lending transaction through the Eurex Clearing model. Under this
structure, a securities loan is negotiated bilaterally with the
borrower, except that in this instance both parties agree to clear
the transaction. The loan is novated to and settled with Eurex
Clearing, which then becomes the counterparty to both the lending
client and the borrower. BNY Mellon administers the loan with Eurex
Clearing until the securities are returned and the loan is
closed.
BNY Mellon has long been a champion of extending central
clearing to buy-side clients. In January
2015 the firm announced its commitment to work toward
developing a cleared securities lending structure to meet the
specific needs of beneficial owners.
ABOUT BNY MELLON
BNY Mellon is a global investments
company dedicated to helping its clients manage and service their
financial assets throughout the investment lifecycle. Whether
providing financial services for institutions, corporations or
individual investors, BNY Mellon delivers informed investment
management and investment services in 35 countries. As of
March 31, 2019, BNY Mellon had
$34.5 trillion in assets under
custody and/or administration, and $1.8
trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold,
manage, service, distribute or restructure investments. BNY Mellon
is the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Additional information is available on
www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our
newsroom at www.bnymellon.com/newsroom for the latest company
news.
ABOUT EUREX CLEARING'S LENDING CCP
Eurex Clearing's
Lending CCP covers loans in global fixed income securities,
equities and exchange-traded funds in Europe; its strategic partners are some of the
largest providers of financial services to institutional investors
and securities lending agents. The direct CCP access for beneficial
owners via the Specific Lender License provides significant
benefits to market participants. It preserves the
relationship-driven business structure and delivers the capital
efficiency and safety associated with central clearing. Our Lending
CCP reduces counterparty risk exposure and eliminates the need for
multiple credit evaluations. As part of Deutsche Börse, Eurex
Clearing is the only infrastructure provider with an integrated
clearing offering across derivatives, equities, securities lending
and repo transactions.
Contacts:
Peter Madigan
+1 212 815 2308
peter.madigan@bnymellon.com
Irmgard Thiessen
+49 69 211 15911
irmgard.thiessen@deutsche-boerse.com
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SOURCE BNY Mellon