Eurex sec lending CCP signs Morgan Stanley
Morgan Stanley is set to become a clearing member of the Eurex Clearing Securities Lending CCP. The partners aim to finalise the process by the end of October.
Tom Wipf, managing director and global head of bank resource management, Morgan Stanley, said: “Central clearing solutions for securities financing transactions are an important market development. We believe that this partnership with Eurex Clearing is a major step forward in providing these important risk management alternatives to our clients.”
Susan O’Flynn, managing director and global head of CCP strategy and optimisation at the investment bank, added: “Morgan Stanley is supportive of CCP solutions for securities lending such as the Eurex Clearing model as it allows us to preserve our client relationships and deliver best execution with risk, resource and operational efficiencies.
“Tiered membership plays a critical part in facilitating buy-side participation through different forms such as the specific lender license.”
The specific lender license is a unique feature of the CCP offered by Eurex Clearing, which launched the Securities Lending CCP in November 2012. It offers tiered membership to the buy side, which the firm says increases the liquidity available to clients. The set-up preserves the structure of the largely bilateral securities lending market while offering the capital efficiency associated with central clearing.
Matthias Graulich, chief client officer and member of the Eurex Clearing executive board, said: “We are very pleased that Morgan Stanley as a global leader and pioneer in financial markets has decided to use our Lending CCP. This confirms the strong value proposition of our clearing service for bilaterally agreed securities lending transactions.”
The Securities Lending CCP service is based on established systems and risk management standards Eurex Clearing, part of the Deutsche Börse Group. Securities lending transactions from Eurex Repo’s SecLend Market or via Pirum’s CCP Gateway can be cleared by Eurex Clearing. The service is integrated with two tri-party collateral agents, Clearstream Banking Luxembourg and Euroclear Bank.
The CCP clears equities from Belgium, France, Germany, the Netherlands and Switzerland as well as a wide range of international fixed income instruments and exchange-traded funds.
Four clearing members have already been admitted to the service and have cleared their first transactions. Further market participants are in the admission and on-boarding process.
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