Dutch pension fund PGGM plans to connect with European
central counterparty (CCP) Eurex to clear securities lending
Roelof van der Struik, who oversees PGGM’s
stock loan operations, told Global Investor/ISF this
week that he is "building up a business case" to connect
directly to Eurex Clearing, not via an agent.
"We’re looking to get the plumbing in place
after three or four years of sitting on the fence," he said.
"The idea of centrally cleared stock loan trades is gaining
"The fact that Morgan Stanley and BNY Mellon have thrown
their weight behind Eurex Clearing's Securities Lending CCP is
important to us," van der Struick, an ISLA board member,
Eurex, part of Deutsche Boerse, aims to bring central
clearing to a significant and so far largely bilateral
securities lending market.
Executives at the firm argue that the CCP route reduces
counterparty risk and provides significant cost benefits to
market participants with increasing capital requirements for
OCC is also attempting to attract a wider range of market
participants, particularly lenders, to its own stock loan CCP
service in the US.
PGGM would be considered an early mover among beneficial
owners if it went ahead with its Eurex connection in
The company acts as service provider for six Dutch pension
funds with €180bn assets under management.
It’s approach to securities lending is high
value, low volume.
Less than 5% of PGGM’s assets (equities) are
out on loan at any one time and it has a restrictive list of
Only high quality bonds are as accepted as collateral and
lending takes place through an agency (custodian).
Roelof van der Struik is an investment manager in PGGM's
front office treasury department and a longtime advocate
of securities lending.
Last week he spoke at the World Pensions Investment Forum in
London, arguing that securities lending can be part of
responsible and risk-averse asset management providing the
various risks (counterparty, collateral, market, operational,
legal and regulatory) are managed.
"Securities lending is an activity that should be overseen
by the front office," he told audience members.
"The devil, in securities lending, is in the detail
— make sure the scale and commitment is there to have
securities lending expertise in-house."
He added that securities lending is an add-on activity and
never the raison de d’être. Instead, it
should be supportive of the fund investment manager and their
"From a risk-return perspective, securities lending would
seem to be a good investment," van der Struik concluded.