Agency securities lending

Agency lending enables customers to maximise the use of their securities through strategic lending. Lenders are in full control of the risk – they are free to select their counterparties and impose tailored credit limits. They also set collateral eligibility criteria as well as haircuts and concentration limits.

The agency lending service gives lenders the opportunity to carry out more structured trades compared to principal lending services which are subject to certain concentration and duration limits. For example, all types of term and equity trades are eligible under the agency lending service. This means that lenders can maximise their revenue opportunities by reacting quickly to evolving market demand.

The risk for lenders is further reduced as all loans are fully collateralised with a transfer of title on the collateral to the lenders. Clearstream handles all collateral management aspects, both the loans and the collateral are marked to market daily. In addition, lenders benefit from a more attractive fee split for agency lending compared to principal lending.