SecFinex to close doors
29 November 2011 London
Image: Shutterstock
Securities lending MTF, SecFinex, will no longer be operational SLT has confirmed. The trading platform will cease to take new business as of close this Friday while NYSE management works with the regulator and clients to close out any business. Though no timeframe could be provided, it is not expected to take a "lengthy period of time".
Lee Hodgkinson, head of European sales and relationship management at NYSE Euronext, said that though the company believes central clearing will play a major role in the securities lending market over the long term, in the current economic climate, SecFinex has struggled to gain sufficient traction.
"Shareholders, including NYSE Euronext, have reviewed their strategic investment in SecFinex and have determined that providing further financial support for the company in this climate is no longer appropriate," Hodgkinson said, adding that CCP clearing for securities lending transactions is unlikely to be a high priority for major banks until there is an explicit regulatory push and Basel III starts to impact capital requirements. NYSE projects the timeline for this to be at least another 12 to 18 months away.
In terms of staffing, the Exchange declined to comment.
In 2000, SecFinex became the first in Europe to introduce a stock loan electronic platform with the launch of a private bilateral market.
NYSE Euronext bought a majority stake in the MTF in 2007 and SecFinex continued to extend its CCP offering throughout Europe in Austria, Germany, Switzerland, Nordics and the UK when it added Six-x clear in 2010, with BNP Paribas becoming the latest general clearing member to sign on this year.
Lee Hodgkinson, head of European sales and relationship management at NYSE Euronext, said that though the company believes central clearing will play a major role in the securities lending market over the long term, in the current economic climate, SecFinex has struggled to gain sufficient traction.
"Shareholders, including NYSE Euronext, have reviewed their strategic investment in SecFinex and have determined that providing further financial support for the company in this climate is no longer appropriate," Hodgkinson said, adding that CCP clearing for securities lending transactions is unlikely to be a high priority for major banks until there is an explicit regulatory push and Basel III starts to impact capital requirements. NYSE projects the timeline for this to be at least another 12 to 18 months away.
In terms of staffing, the Exchange declined to comment.
In 2000, SecFinex became the first in Europe to introduce a stock loan electronic platform with the launch of a private bilateral market.
NYSE Euronext bought a majority stake in the MTF in 2007 and SecFinex continued to extend its CCP offering throughout Europe in Austria, Germany, Switzerland, Nordics and the UK when it added Six-x clear in 2010, with BNP Paribas becoming the latest general clearing member to sign on this year.
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