Securities Financing Transaction (SFT) Clearing

Facilitate overnight equity financing transactions through centralized clearing and netting that reduces risk, improves capital efficiency and expands lending opportunities.

Securities Financing Transaction (SFT) Clearing

Reducing Risk, Unlocking Capital Efficiency

Securities financing transactions support market liquidity, but traditional bilateral borrowing and lending arrangements can create fragmented processes, increased counterparty exposure and higher capital costs. SFT Clearing addresses these challenges by centralizing the clearing and settlement of overnight equity borrows and loans, with NSCC serving as the central counterparty (CCP).

By novating trades to NSCC, participants reduce bilateral risk, unlock netting efficiencies and simplify post-trade operations. The service supports both equity SFTs between NSCC Members and client equity SFTs intermediated by Sponsoring Members or Agent Clearing Members, offering four distinct access models that provide flexibility in how participants engage with central clearing. Together, these capabilities help firms optimize capital usage while maintaining strong risk management standards.

  • Client base growth since Jan 2025

  • Received SEC approval for SFT Agent Clearing Net Membership

Data as of Q2 2026

Key Features & Benefits

Potential Capital and Balance Sheet Optimization

Multilateral netting for NSCC clearing funds help reduce capital requirements and support more efficient balance sheet management across transactions.

Greater Flexibility in Managing Counterparty Exposure

Single Counterparty Credit Limit (SCCL) exemption removes the requirement to comply with SCCL thresholds, providing greater flexibility in managing counterparty exposures.

Simplified Regulatory Processes

The elimination of Agency Lending Disclosure (ALD) reporting reduces administrative burden by removing the need to submit ALD reports and book trades to underlying client lenders.

Increased Operational Efficiency

Pre-matching of executions and Lifecycle events, including rolling the transaction forward by a day by using the price differential process and straight-through processing of recalls, corporate actions and buy-ins help reduce manual effort and streamline operations.

Improved Cash Flow Management

Daily debit and credits of interest payments replace a monthly billing process and reduces reconciliations, supporting more timely and efficient cash management.

Expanded Borrowing and Lending Opportunities

A centralized clearing model can support increased borrowing and lending capacity across the securities financing ecosystem.

Using This Service

Full-Service NSCC Members

Participation is open to NSCC full-service Clearing Members, including those acting as Sponsoring Members or Agent Clearing Members for institutional clients and firms desiring to participate as limited Sponsored Members.

Full-Service NSCC Members

Participation is open to NSCC full-service Clearing Members, including those acting as Sponsoring Members or Agent Clearing Members for institutional clients and firms desiring to participate as limited Sponsored Members.

Resources