The SFT Clearing service introduces central clearing for equity securities financing transactions, including lending, borrowing and Repo to:

  • Support central clearing of institutional clients’ equity SFTs intermediated by sponsoring members.
  • Support central clearing of equity SFTs between full service NSCC members.
  • Maximize capital efficiency and mitigates systemic risks by introducing more membership and cleared transaction opportunities for market participants.

The key parameters of the SFT Clearing service include:

  • Requirement to submit SFTs to NSCC on a locked-in/matched basis by an approved submitter.
  • All SFT activity will have a term with overnight being supported on day 1. Settlements would be allowed to pair off daily against new activity  to minimize the operational burden of settling overnight obligations. NSCC would calculate and process price differences/mark-to-market that are created by the daily pair off.
  • 100% in cash collateral would be required to settle each cleared SFT. However, a member would be permitted, but not required, to post additional haircut above 100% (for example, 102%) to such clients.
  • SFTs settle RVP/DVP at DTC.
  • Upon the initial settlement of the SFT, NSCC would novate and guarantee its final settlement.
  • NSCC will generally support the activity in CNS eligible securities.
  • NSCC would process certain mandatory corporate actions and cash dividends for novated SFTs.

Given the cleared SFT environment creates some changes, vendors have been involved in the product development process. For more information about this new service and sponsored membership, contact DTCC at This email address is being protected from spambots. You need JavaScript enabled to view it..

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