OCC sec lending activity continues to pick up
OCC's securities lending CCP activity more than doubled in May.
The Chicago-based clearing house, which becomes the lender to the borrower and the borrower to the lender for each trade, said there were over 167,000 transactions last month, a 52% rise compared last year.
Year-to-date stock loan activity is up 46% from 2015 with 787,220 new loan transactions so far in 2016.
OCC is the only central counterparty in the US that clears stock loan trades.
Market participants are looking at how a central counterparty solution can enhance the efficiency of securities lending activity for lenders as well as the broker-dealer borrowing community.
Earlier this year, OCC's business development chief Scot Warren said that expanding the group's centrally cleared model for securities lending was a top priority.
Eurex Clearing, owned by Deutsche Borse, is building its own centrally cleared service for stock loan trades in the US.
Effective use of capital, risk mitigation and operational efficiency have all been cited as potential advantages for firms opting to centrally clear stock loan trades.
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