Eurex Clearing and Pirum Systems, the automated post-trading platform for the securities finance industry, have partnered to facilitate market access to Eurex Clearing’s upcoming lending CCP.
The connectivity agreement will enable market participants to leverage Pirum’s automation platform to transmit bilaterally negotiated transactions to Eurex Clearing for CCP novation and downstream processing.
The CCP will be launched in mid-2012, once the platform has determined the readiness for potential users. Eurex Clearing spokesperson Heiner Seidel said that Pirum is one of potentially multiple systems that the CCP can connect with in order to be added to existing market infrastructures.
“We are very pleased to work with Pirum in our effort to bring the safety and efficiency of Eurex Clearing’s CCP services to the securities lending market. Leveraging Pirum’s existing connectivity will significantly simplify access to our new service and will directly benefit our customers,” said Thomas Book, member of the Eurex Executive Board, responsible for clearing.
“This partnership will enable our extensive customer base to make use of their connectivity with Pirum to use Eurex Clearing’s new and innovative securities lending CCP Service. Pirum’s solution will offer seamless integration for CCP transactions using the same business processes and system interfaces that are already used for bilateral transactions,” said Rupert Perry, CEO of Pirum Systems.
On launching mid-year, the CCP will be the first to offer central clearing to the bilateral securities lending market, which, Eurex Clearing says, will offer safety and efficiency to those participants. The CCP will cover European markets for loans in equities, exchange-traded funds as well as fixed income securities. The CCP is intended to reduce counterparty risk exposure and eliminate the need for multiple credit evaluations.
In addition, the CCP will also introduce a member model for beneficial owners in order to support the existing relationship between these participants and agent lenders and beneficial owners.
Eurex Clearing also intends to further expand the range of its lending CCP service by leveraging internal solutions. The ultimate goal is to autoconnect as many platforms and trading systems as possible, said Seidel.
Reporting by Janet du Chenne, Global Custodian, an Asset International publication.