EquiLend has connected to Eurex Clearing’s central counterparty (CCP) service for the securities lending market.

The link-up covers stock loans and ETFs in Europe as well as fixed income securities.

Customers of EquiLend, an industry-owned platform for electronic securities lending and borrowing, can connect directly to the Lending CCP service.

Securities finance post-trade specialist Pirum signed a connectivity agreement with Eurex when the Deutsche Börse subsidiary launched the service in 2012.

Eurex's platform was the first to offer clearing licenses to both buy-side and sell-side securities lending participants in Europe, the US and other countries.

Clearing members include Morgan Stanley, State Street, Natixis and BNY Mellon. 

A US CCP model for securities lending by the OCC remains sell-side only but has witnessed increasing volumes over the past twelve months.

The rise of central clearing comes amid increases in capital costs which are forcing borrowers and agent lenders to focus on counterparty exposure and the resulting balance sheet impact.

Effective use of capital, risk mitigation, increased utilisation and operational efficiency have all been cited as potential advantages for beneficial owners using CCPs. 

“We are pleased that our participants from buy and sell-side will be utilising our connectivity to Eurex Clearing’s Lending CCP as an additional tool in their trading activity,” said Brian Lamb, chief executive of EquiLend.

“Driven by the need for further capital and cost efficiencies as well as the overall market environment, the securities finance industry realises more and more the benefits of a CCP model.”

Marcel Naas, global head of sales funding & financing (trading and clearing) at Eurex, added that the usage by Equilend members will “further enhance the attractiveness” of Eurex’s Lending CCP and be "mutually beneficial" to clients and other connected markets across asset-classes.