SecFinex, a European electronic trading platform for securities finance, has announced the launch dates for
central counterparty (CCP) services for stock lending and borrowing on the SecFinex Order Market.
The services will be available for equity markets in Belgium, France, the Netherlands and Portugal from 19 June, with European clearing house LCH.Clearnet as the central clearer. The services will launch in Austria, Denmark, Finland, Germany, Norway, Sweden and Switzerland from 15 September, with central clearing provided by Swiss CCP SIX x-clear, and in the UK by the end of the year, with central clearing provided by pan-European clearer EuroCCP.
According to SecFinex, using CCPs for securities lending will eliminate multi-entity counterparty risk, enhance market transparency and increase capital efficiency.
The move follows a raft of regulatory initiatives aimed at using CCPs to clear trades in a wider range of financial instruments. These efforts were spurred by the collapse of US investment bank Lehman Brothers last year, which hit counterparties who had traded with the bank without CCP protection. Last month, US treasury secretary Tim Geithner said he wanted to change US law to require standardised over-the-counter derivatives to be cleared through regulated CCPs.
“Since the initial investment by NYSE Euronext in March 2007, SecFinex has been working to develop solutions that enable the trading and central clearing of securities lending transactions and we believe the market standards and disciplines that will result from utilising our anonymous market will prove increasingly beneficial to the evolution of securities finance,” said Peter Fenichel, CEO of SecFinex, in a statement.
SecFinex is majority owned by global exchange group NYSE Euronext.