New York-based securities finance company EquiLend is making inroads into the growing central clearing market for stock loan trades.

The company has acquired AQS, a platform which facilitates clearing and settlement via Chicago-based OCC, the world’s largest equity derivatives clearing firm.

No terms of the deal were released by either party, but the purchase also includes the securities lending technology systems from PDQ Enterprises, operator of PDQ ATS.

A rebrand - AQS  to EquiLend Clearing Services - will occur over the coming months.

The acquisition represents a major post-trade push from the company which is owned by a consortium of banks including Goldman Sachs and J.P. Morgan.

Set-up in 2000, the business also runs BondLend, a global fixed income securities finance platform and securities finance data service DataLend.

“Momentum has been building in the past two years in support of CCPs in the securities finance marketplace," said EquiLend chief executive Brian Lamb.

“Balance sheet costs, risk weighting and tougher capital-adequacy requirements have highlighted to the industry the potential benefits of using central clearing services.

“By providing seamless access to OCC’s Market Loan Program, the securities finance market now will have unprecedented access to central clearing services.”

OCC is the only US central counterparty for equity stock loan transactions, where it guarantees return of stock or cash to stock loan participants.

Regulatory change designed to reduce systemic risk post-crisis had created a demand for cleared solutions, in turn CCPs have expanded the solutions they provide to the market.

Eurex Clearing offers similar CCP services for the securities lending market in Europe. 

Initially, AQS will continue to operate in its current form, but by the end of 2016 EquiLend plans to connect its trading and post-trade services, including its multi-asset class trading platform NGT, with AQS.

The connection will provide market participants with straight-through trade processing capabilities and electronic trade submission to OCC’s stock loan clearing solutions, a statement added.

AQS chief executive Pat Cestaro and co-founder Greg DePetris will remain as senior advisers to EquiLend regarding CCP-related issues.

OCC chairman Craig Donohue welcomed the move.

“By working with AQS, and now EquiLend, OCC is continuing to expand its strong foundation in clearing and risk management capabilities for securities lending, as reflected by the 5,000-plus loans processed daily and approximately $130bn in risk-managed open loans," he added.