Broadridge Financial Solutions, a global fintech firm, has partnered with the Depository Trust & Clearing Corporation (DTCC), to become an approved securities financing transaction (SFT) submitter for the National Securities Clearing Corporation (NSCC) SFT clearing programme.
The NSCC is an equities clearing subsidiary of DTCC that provides centralised clearing, settlement services and information to the securities lending industry.
The proposed new SFT clearing service supports central clearing and settlement services for overnight borrows and loans of equity securities and will be offered by NSCC. The central clearing service will significantly enhance market access and reduce risk and costs for DTCC clients, says Broadridge.
The service will support central clearing of institutional clients’ equites SFT transactions intermediated by sponsoring members or agent clearing members, or SFT transactions between full service NSCC members.
There will be different models accessible to financial institutions who want to join the SFT clearing service either through sponsored membership or a direct NSCC membership route.
According to Broadridge, the service allows firms to leverage the benefits of the central counterparties while freeing up credit lines and reducing overall capital usage.
Broadridge is moving into building and testing phases in the role as an approved SFT submitter for the new SFT clearing service, which is expected to launch in the third quarter of 2021, subject to regulatory approval.
Vijay Mayadas, president of capital markets at Broadridge, says: “We are excited to be working with NSCC and DTCC to provide a seamless solution to the securities finance business domain. 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.”
Murray Pozmanter, head of clearing agency services and global business operations at DTCC, says: “We thank Broadridge for its partnership and commitment to submitting transactions into the new SFT clearing service. 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 utilisation levels.”
