#BNY #Securities Lending #Cboe Clear Europe

BNY Takes the Lead in Financial Innovation with Cboe Clear Europe's New Service

In a groundbreaking development for the financial markets, BNY (Bank of New York) has made headlines by becoming the first Agent Lender to leverage the Securities Financing Transaction Service (SFT) by Cboe Clear Europe. This innovative partnership aims at expanding access to a crucial segment of the securities lending market, offering enhanced efficiencies and further strengthening the role of central clearing services.

Cboe Global Markets, Inc., a leading derivatives and securities exchange network, announced this significant milestone, emphasizing the transformative nature of the SFT clearing service. By partnering with BNY to clear securities financing transactions (SFTs) for ICBE clients, Cboe is committed to forging a new path for financial institutions and their customers.

According to Vikesh Patel, Chairperson of Cboe Clear Europe, the introduction of this service marks a momentous occasion, as it extends the benefits of centrally cleared SFTs to a freshly defined customer segment, which includes state investment funds, pension funds, and central banks. Patel noted, “We are thrilled to welcome BNY as our first Agent Lender for this transformative service and to expand it to ICBE clients. The innovative model we have created will not only augment market confidence but will also optimize collateral efficiency, enabling ICBE participants to engage in securities finance with unmatched levels of safety and transparency.”

The newly designed title transfer model with a pledge-back feature is a crucial component of this initiative. It allows ICBE clients to enjoy the advantages of central clearing for SFTs without the obligation to post margin or contribute to the default fund of the central counterparty when acting as lenders. This approach significantly enhances the attractiveness of ICBE as counterparties for borrowers utilizing Cboe Clear Europe’s services.

As a significant player in the global financial arena and recognized as the world's largest Agent Lender, BNY's engagement in this innovative model underscored its commitment to cultivating advancements in financing and collateral ecosystems. Laide Majiyagbe, Global Head of Liquidity, Financing, and Collateral at BNY, highlighted, “Our collaboration with Cboe Clear Europe on this groundbreaking solution reflects BNY’s dedication to driving innovation and customer focus in the financing ecosystem. We take pride in being the first to go live with a centrally cleared triparty model that supports ICBE-compliant clearing.