Cboe Global Markets’ Amsterdam-based clearing house, Cboe Clear Europe, is set to roll out a Central Counterparty clearing service for securities financing transactions (SFT) in Q3 2024.
The pan-European CCP will offer a number of services for SFTs in European cash equities and ETFs, helping to improve capital efficiencies and enhance risk management.
Matching, CCP clearing, settlement and post-trade lifecycle management will be available to agent lenders and borrowers, with settlement taking place in 19 European Central Securities Depositories (CSDs).
Several agent lenders, such as BNY Mellon and Citi, are expected to support the launch of the service, as well as a number of participant borrowers including Barclays, JP Morgan and Goldman Sachs.
The CCP clearing service is designed to help market participants navigate new regulations such as the Central Securities Depositories Regulation (CSDR), Securities Financing Transactions Regulation (SFTR) and planned Basel IV implementation, regulations which have led to increased capital demands and operational inefficiencies.
Cboe Clear Europe president Vikesh Patel said: “Clearing operators often benefit from regulatory changes, as our core activities promote improved risk management, greater capital efficiencies and standardised processes around trade processing.
“The regulatory environment around clearing houses is certainly in flux, with the refit of both CSDR and EMIR taking place and will work on advocating for changes that advance the industry.”
Market participants are also set to gain other operational advantages, such as greater settlement efficiency, elimination of agent lender disclosures and improved practices around fees management, corporate actions and post-trade lifecycle processing.
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