03 January 2018
Chicago
Reporter: Jenna Lomax

OCC securities lending activity increases again


OCC's securities lending volume through its central counterparty (CCP) was up 16 percent in new loans in December, compared to the same period last year.

The equity derivative clearinghouse oversaw 206,338 securities lending transactions last month.

Year-to-date, securities lending activity was up by 22 percent, with 2.33 million new loan transactions.

The average daily loan cleared by OCC was valued at $155.1 billion last month.

OCC’s cleared futures volume was also up 32 percent from 2016, adding up to 10.4 million contracts over the month.

OCC ended the year with 10 million cleared futures contracts in December, up 5 percent from December 2016.

Year-to-date, OCC’s average daily cleared futures volume was up 33 percent in 2017 with 549,919 contracts.

OCC has also be given reaffirmation of its AA+/stable rating by Standard & Poor’s (S&P) as of 28 December 2017.

In its report, S&P said OCC’s outlook is stable because it expects OCC “to implement the new financial safeguards in 2018, provided it receives regulatory approval.”

S&P also commented that OCC “enjoys large economies of scale and has ample capacity to absorb up to two-and-a-half times the largest historical trading volumes per day with the current OCC systems.”

“As a processor of over 17.5 million contracts daily, we consider OCC's operational risk to be high. The company must meet the demands of its members and the trading community at large, which requires exceptional technology and back-office operations.”

Craig Donohue, OCC executive chairman and CEO, said: “S&P’s decision is a powerful recognition of our efforts to strengthen OCC’s financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.”

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