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Eurex Clearing and Clearstream to launch central counterparty service for securities lending

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Eurex Clearing and Clearstream Banking Luxembourg have announced plans to launch a central counterparty service for securities lending in the second quarter of 2009, subject to regulatory

Eurex Clearing and Clearstream Banking Luxembourg have announced plans to launch a central counterparty service for securities lending in the second quarter of 2009, subject to regulatory approval.

Eurex Clearing will act as the clearing house for Clearstream’s ASLplus strategic securities lending programme. Securities lending customers will benefit from netting on an anonymous basis, balance sheet relief and mitigation of counterparty risk. The partners say their initiative will create a European market standard for clearing securities lending transactions via a central counterparty.

‘The introduction of a central counterparty for securities lending transactions will deliver significant efficiencies to lenders and borrowers,’ says Thomas Book, the member of the Eurex executive board responsible for clearing. ‘Against the backdrop of the financial market crisis, central clearing services have become even more important to help stabilise markets, mitigate counterparty risk and increase market efficiency.’

Stefan Lepp, a member of the Clearstream board and head of global securities financing, adds, ‘With the introduction of a central counterparty for securities lending, we expect the impact to be as positive on the market as the introduction of a central counterparty for our GC Pooling market.

‘The central counterparty service will help restore confidence in the lending industry and lead to a new quality of liquidity. This joint offering once again emphasises the advantages of Deutsche Börse Group’s integrated business model – we can offer a complete service package from a single source.’

The new offering is initially designed to complement Clearstream Banking Luxembourg’s ASLplus programme, launched in December 2005. The central counterparty service will also realise synergies within the Deutsche Börse Group, including links to Eurex SecLend, the electronic market for securities lending, and to Clearstream’s securities lending services in Luxembourg and Frankfurt.

Clearstream is an international securities depository responsible for post-trade services within Deutsche Börse Group. Its global securities financing services offer settlement and custodial services along with instruments for collateral management. The service business comprises tri-party repo, securities lending and collateral management.

Eurex Clearing offers fully automated and straight-through post-trade services for derivatives, equities, repo and fixed-income transactions traded on international exchanges and trading platforms. It is a wholly owned subsidiary of Eurex Frankfurt and is jointly operated by Deutsche Börse and SIX Swiss Exchange.

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