State Street Corporation announced on December 17, 2025 that it has joined the Options Clearing Corporation (OCC) as the first bank clearing member of OCC’s Stock Loan Program. The partnership enables State Street’s Prime Services platform to offer central‑counterparty clearing and settlement for securities‑lending transactions, a capability that was previously unavailable to custodian‑based prime services providers.
The OCC’s Stock Loan Program is one of two securities‑lending programs it operates. The Stock Loan/Hedge Program allows bilateral trades, while the Market Loan Program facilitates anonymous, market‑based lending. In both programs the OCC acts as the principal counterparty, guaranteeing the transaction and providing a single point of settlement. By becoming a clearing member, State Street can now route its clients’ securities‑lending activity through OCC’s clearing infrastructure, thereby eliminating the need for bilateral settlement and the associated counterparty risk.
The financial impact of the move is substantial. State Street estimates that clearing through OCC will reduce its risk‑weighted asset exposure by roughly 95 percent compared with uncleared lending. This reduction translates into significant capital‑efficiency gains, freeing up regulatory capital that can be redeployed to other growth initiatives or returned to clients. The partnership also delivers a built‑in credit guarantee from OCC, further mitigating counterparty credit risk for State Street’s clients.
Strategically, the clearing membership strengthens State Street’s Alpha platform and its custody‑based Prime Services offering. Central clearing is a growing industry trend that enhances risk management and capital efficiency across securities‑finance markets. By being the first bank to secure this membership, State Street positions itself as a leader in the space, potentially attracting new clients who require cleared securities‑lending solutions and differentiating the firm from competitors that still rely on uncleared transactions.
Brendan Eccles, Global Head of Prime Services at State Street, said the partnership “reflects the growing importance of central clearing within securities finance and strengthens capital efficiency within our custody‑based Prime Services model while broadening client access to securities‑lending opportunities.” Oberon Knapp, Managing Director of Strategy and Head of Securities Finance at OCC, added that the move “demonstrates the value central clearing can bring to custody‑based services and delivers around 95 percent risk‑weighted asset savings compared with uncleared securities lending.”
Industry observers note that OCC is expanding its Stock Loan Program and plans to phase out the Hedge Program in favor of the Market Loan Program as part of its Ovation system upgrade. State Street’s early adoption of OCC’s clearing infrastructure positions it to benefit from these future enhancements and to capture a larger share of the securities‑finance market as central clearing becomes the norm.
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