OCC Admits State Street as First Bank Clearing Member in Securities Lending
The Options Clearing Corporation (OCC) has welcomed State Street as the first bank to become a clearing member, marking a significant development for central clearing in the securities lending market. Under the arrangement, OCC will provide central counterparty clearing and settlement through its Stock Loan Program for State Street’s Prime Services platform.
The Prime Services offering delivers integrated, custody-based securities lending answers to institutional investors. By joining OCC as a clearing member, State Street gains access to centrally cleared securities lending, while improving capital efficiency for both the bank and its clients.
The move reflects a broader shift within securities finance toward centrally cleared models, particularly as regulatory capital requirements and balance-sheet efficiency continue to shape how large institutions structure lending and financing services.
Capital Efficiency and Risk Reduction Drive Adoption
According to OCC, its qualifying central counterparty status provides clearing members with approximately 95% risk-weighted asset savings compared with uncleared . OCC also guarantees transactions it clears, mitigating and simplifying post-trade processes for participants.
“State Street’s decision to be our first bank clearing member is a significant milestone for both OCC and the marketplace,” said Oberon Knapp, Managing Director of Strategy and Head of Securities Finance at OCC. “Our qualifying central counterparty status provides our members with approximately 95% risk-weighted asset savings compared to uncleared lending activity, and our guarantee assists mitigate counterparty credit risk.”
Knapp added that expanded membership remains a strategic priority for OCC, enabling a broader range of market participants to benefit from the capital efficiency, operational simplicity and risk reduction associated with central clearing.
Strengthening Prime Services and the Securities Finance Ecosystem
State Street said the clearing membership aligns with the strategic evolution of its Prime Services business. By integrating OCC clearing into its custody-based model, the bank aims to strengthen balance-sheet efficiency while for clients.
“As a market leader with our Prime Services business, becoming an OCC clearing member was a strategic milestone reflecting the growing importance of central clearing in the securities finance landscape,” said Brendan Eccles, global head of Prime Services at State Street. “This relationship strengthens our capital efficiency within our custody-based Prime Services model while providing our clients with greater access to securities lending opportunities.”
OCC currently operates two principal securities lending programs: the Stock Loan/Hedge Program, where trades are executed bilaterally, and the Market Loan Program, which supports anonymous execution through a loan market. In both models, OCC acts as principal counterparty, guaranteeing the obligations of lenders and borrowers and reinforcing its role at the centre of the global .
