Securities lending

Specific Lender License

The Lending CCP’s Specific Lender License supports the unique relationship between Beneficial Owners and Agent Lenders.

What is the Specific Lender License?

The direct CCP access for Beneficial Owners via the Specific Lender License, provides significant benefits to market participants. It preserves the relationship driven business structure and at the same time delivers the capital efficiency and safety associated with central clearing.

As a unique feature, the Specific Lender License benefits both Agent Lenders and their Beneficial Owners. It allows for greater participation by the buy side, offering tiered membership, thus increasing the liquidity available to clients.

Key benefits:

  • Beneficial Owner maintains business relationship with Agent Lender
    • Agent Lender continues to arrange loans for CCP eligible transactions
    • Operational links with Flow Provider and CCP maintained by Agent Lender
    • Agent Lender reports loans and collateral through existing reporting set
  • Beneficial Owner uses an approved Specific Lender License with a distinctive CCP membership
    • No requirement to clear through a General Clearing Member
    • No requirement to pay margin
    • No default fund contribution
  • Dedicated requirements for Specific Lender License
    • Supervised financial sector entity located within the EU, Switzerland and other selected countries
    • Permission to perform securities lending business
    • Pre-requisite is collateral pledge model with Tri-Party Collateral Agent
  • Lending CCP delivers robust collateral and risk management processes

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