PGGM: Eurex Clearing is securities lending’s ‘most important innovation’
06 September 2018 London
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PGGM sees Eurex Clearing as the “most important innovation” in securities lending in the past few years, according to Roelof van der Struik, investment manager at PGGM.
He said that the “innovative product needs the backing of committed market parties to make it the success it deserves”.
Van der Struik made the comments in a recent interview conducted by Deutsche Börse, in which users of its securities lending central counterparty—PGGM and BNY Mellon— discussed its benefits and industry trends.
According to Van der Struik, “For PGGM, the Eurex cleared lending route complements the current lending routes to market and therefore immediately adds value.”
Interviewees were also asked what due diligence measures organisations had undertaken to enable the implementation of central clearing in their business models.
James Day, managing director and business executive for Securities Finance in Europe, the Middle East, and Africa, at BNY Mellon, answered: “Clients contract with Eurex Clearing to become a specific lender license holder (SLLH). By becoming an SLLH, they agree and accept the clearing terms and conditions of Eurex Clearing that pertain to securities lending activities.”
He added: “As a result, clients’ legal and risk teams are fully engaged and are carefully and thoroughly reviewing the clearing terms and conditions to ensure they fully understand all of
the rules and nuances associated with the central counterparty (CCP) model.”
When asked what recent regulatory requirements had influenced decisions to participate in a cleared solution for securities lending and repo, Day said: “Regulatory factors have been a major force in shaping the securities financing industry over the last several years.”
He added: “Clients are aware of the changing environment in which they operate in, and are keen to remain relevant to borrowers and continue to generate revenue from their lending programmes. They are viewing the CCP as one of the tools to enable them to
meet that objective.”
To read the full interview, check out the latest issue of Securities Lending Times and get our latest issue delivered to your inbox.
Alternatively, pick up your physical copy of Securities Lending Times at the London IMN 22nd Annual European Beneficial Owners' Securities Finance & Collateral Management Conference on 12 and 13 September.
He said that the “innovative product needs the backing of committed market parties to make it the success it deserves”.
Van der Struik made the comments in a recent interview conducted by Deutsche Börse, in which users of its securities lending central counterparty—PGGM and BNY Mellon— discussed its benefits and industry trends.
According to Van der Struik, “For PGGM, the Eurex cleared lending route complements the current lending routes to market and therefore immediately adds value.”
Interviewees were also asked what due diligence measures organisations had undertaken to enable the implementation of central clearing in their business models.
James Day, managing director and business executive for Securities Finance in Europe, the Middle East, and Africa, at BNY Mellon, answered: “Clients contract with Eurex Clearing to become a specific lender license holder (SLLH). By becoming an SLLH, they agree and accept the clearing terms and conditions of Eurex Clearing that pertain to securities lending activities.”
He added: “As a result, clients’ legal and risk teams are fully engaged and are carefully and thoroughly reviewing the clearing terms and conditions to ensure they fully understand all of
the rules and nuances associated with the central counterparty (CCP) model.”
When asked what recent regulatory requirements had influenced decisions to participate in a cleared solution for securities lending and repo, Day said: “Regulatory factors have been a major force in shaping the securities financing industry over the last several years.”
He added: “Clients are aware of the changing environment in which they operate in, and are keen to remain relevant to borrowers and continue to generate revenue from their lending programmes. They are viewing the CCP as one of the tools to enable them to
meet that objective.”
To read the full interview, check out the latest issue of Securities Lending Times and get our latest issue delivered to your inbox.
Alternatively, pick up your physical copy of Securities Lending Times at the London IMN 22nd Annual European Beneficial Owners' Securities Finance & Collateral Management Conference on 12 and 13 September.
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