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Sec lenders say "not right time" for CCPs
15 March 2012
Eurex Clearing will soon launch its CCP service for
European securities lending, but could industry apathy
about the need to establish the model see it face the same fate as SecFinex? Stephanie Baxter enquires
The notion of having a central counterparty (CCP) model in the securities lending industry has been fiercely debated for years without any real conclusion or compromise.
Now that both European and US regulators are pushing OTC derivatives onto exchanges through Mifid II and Dodd Frank, there are concerns that the same could happen in securities lending as the Financial Stability Board’s (FSB’s) task force investigates the business as part of its remit to tackle systemic risk in shadow banking.
However, the FSB has not yet said if a CCP could be on the cards and the industry will have to wait until the end of the year for the conclusion of its investigations. Yet there was a major setback in the push for CCPs in the European market after NYSE Euronext announced last November that SecFinex – a platform that gave lenders and borrowers access to CCPs in...
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