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GFF Summit: It’s all about liquidity and how to unlock it

Release date: 27 Jan 2020 | Eurex Exchange, Eurex Clearing, Eurex Group

GFF Summit: It’s all about liquidity and how to unlock it

By Jonathan Lombardo, Head of Fixed Income Sales Continental Europe at Eurex Repo
Jonathan Lombardo, Fixed Income, Funding & Financing Sales, Eurex ClearingZoom

Jonathan Lombardo, Fixed Income, Funding & Financing Sales, Eurex Clearing

Financial institutions are seeking more and more sophisticated collateral solutions enabling them to use a wide range of securities to back their trades. As liquidity is always the key driver, we have taken additional measures to broaden our Lending CCP offering by extending our services aiming to include additional value to Agent Lenders and their Beneficial Owners. Here are two examples:

Concerns raised – unlocking liquidity for UCITS funds

To address the liquidity concerns for the Undertakings for Collective Investments in Transferable Securities (UCITS), we have created a title transfer with a pledge-back collateralization model as greenlighted by European regulators.

We offer this service to Beneficial Owners (UCITS/mutual funds, pension funds and insurance companies) in addition to our current Secured Pledge model for securities lending transactions – in which the borrower of funds uses securities as a form of collateral to secure the funds it borrows or takes from the lender.

Reverse Stock Loan – using cash as the principal loan security

We now enable banks and their buy-side clients to continue their existing business relationships using cash as the principal loan security. Specific Lender Licence holder clients can act as net cash providers to banks through the CCP. Collateral will be pledged to the lenders within the eligible Triparty Collateral. Agents Lenders can agree with us and their original borrowers on the collateral eligibility (within the eligible collateral universe of Eurex Clearing AG).

You can learn more about securities lending and how to unlock liquidity at the GFF Summit in Luxembourg from 28 to 30 January.