The National Securities Clearing Corporation (NSCC) is constructing a new central clearing offering for overnight equities borrowing and lending activities for current full-service NSCC members and institutional clients intermediated by Sponsoring Members or Agent Clearing Members.
The new Securities Financing Transactions (SFT) clearing service is expected to significantly enhance market access, reduce risk and costs, and offer new efficiency opportunities for participating members. NSCC is the equity clearing subsidiary of the Depositary Trust and Clearing Corporation (DTCC).
Broadridge Financial Solutions has begun development to support its role as an Approved SFT Submitter as it prepares for the launch of the new service. Vijay Mayadas, president of Capital Markets at Broadridge, said in a statement: “Our position as Approved SFT Submitter ensures our clients will benefit from further integration, automation and reduced costs, and further enhances our status as a trusted provider in the securities finance industry.”
Building upon the successful efforts of Broadridge’s development and consulting approach to DTCC’s Sponsored Service, offered by DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary, the firm will move into build and testing phases in the role as an Approved SFT Submitter for the new SFT Clearing service, which is expected to launch in Q3 2021.
With flexible technology and extensive connectivity to post-trade applications, the solution will give firms the benefits of a central clearing model while freeing up credit lines, creating more efficient balance sheet usage and trimming current capital charges associated with the business.
Murray Pozmanter, head of Clearing Agency Services and Global Business Operations at DTCC, said in a statement: “The advantages of offering a central clearing model for SFTs are significant and have the potential to be felt market-wide, with balance sheet savings, reduced counterparty risk and increased utilization levels.”