Maximilian Patt
Treasury & Securities Finance
Securities lending
We enable institutional clients and their investment funds to participate in the earnings opportunities of the securities lending market. In the chosen structure of the principal model, the bank acts as a "liquidity hub" where the supply of the investment funds and the demand of the global securities lending market meet.
WE HELP YOU PROVIDE LIQUIDITY TO THE CAPITAL MARKET
Securities lending for Asset Manager
All market participants attach great importance to high liquidity on the capital markets. This is because the more liquid an asset can be traded on the capital market, the more efficiently position adjustments are possible due to narrow bid-ask spreads on the securities markets. Securities lending primarily serves the capital market by providing liquidity. Market participants who are willing to provide the market with liquidity in the respective assets are remunerated by the market in the form of fees.
WE PROTECT YOUR IDENTITY
Customer anonymity
The bank's Liquidity Hub guarantees institutional clients anonymity vis-à-vis other capital market participants. The investment funds conclude securities lending transactions exclusively with us, thus taking advantage of the Bank's broad market access without themselves appearing on the market with the details of their own portfolios. The individual securities lending transactions are concluded under the umbrella of a standardized German master agreement for securities loans (DRV), which must exist as a prerequisite between the KVG of the relevant investment fund and the bank.
BENEFIT FROM OUR BROAD MARKET ACCESS
Market- & Portfolioscreening
Thanks to broad market access to more than 20 international counterparties in the interbank market, trading platforms and other data providers, the Liquidity Hub constantly screens the securities lending market. The portfolios of the investment funds are also screened. In this way, opportunities can be identified at any time, exploited and realized in the form of fees as additional income for the investment funds.
WE ENSURE THE OVERCOLLATERALIZATION OF THE INVESTMENT FUND
Collateral Management
Daily collateral management ensures that the investment funds are overcollateralized at all times in accordance with the requirements of the KAGB and the CSSF. Income in the form of coupons or dividends is due to the beneficial owner, i.e. the lender of securities or the collateral provider. In order to avoid operationally complex processes, securities lending transactions are terminated or collateral is exchanged in daily collateral management when income payments are due.
SO THAT YOU CAN CONCENTRATE ON THE ESSENTIALS
Unrestricted capacity to act
Securities lending transactions do not affect the ability of an investment fund to act. Securities lent by the investment fund may also be sold at any time. If the sale is effected via the bank's Financial Markets department, the securities lending transaction involving the security in question is automatically terminated. It is then no longer necessary for the investment fund to actively terminate the securities lending transaction.
WE TAKE CARE OF ALL RELEVANT REPORTING PROCESSES
Regulatory notification
Since 2020, the requirements of the Securities Financial Transaction Regulation (SFTR) have to be met. This requires all securities financing transactions, including securities lending, to be reported to a trade repository. If delegated to the bank, this reporting is carried out for the investment fund.
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