The Norwegian securities lending and borrowing pool improves the efficiency of securities settlement and consequently market liquidity.
The pool is a multilateral anonymous arrangement where, on the one side, lenders provide securities collectively into the pool and on the other, the pool acts as a lender to borrowers. The pool’s matching program with its matching capabilities brings demand and supply together, enabling a participant to meet its settlement needs or to support trading activity by automatically borrowing securities. The pool helps to increase settlement rates and reduce penalties.
The pool is a cooperative arrangement between SIX x-clear Ltd and VPS (the Norwegian CSD), where VPS performs services in relation to registration, settlement and loan administration, while SIX x-clear Ltd acts as the counterparty on behalf of the pool in all borrowing and lending positions and handles clearing, contract administration, the regulation of available securities in the lending pool, as well as calculation of margin, collateral and interest as well as reporting.