Liquidity management

SGSS has built up an expertise in value-added securities lending services, making us a leading player in this industry.

Through our Liquidity Management division, we offer a large range of products including securities lending and borrowing services, cash collateral reinvestment services, securities lending middle and back office in-sourcing, intraday liquidity and Foreign Exchange.

Liquidity Management, a specialized business unit of Société Générale Securities Services (SGSS), was specifically set up in 2004, in response to the increasing market demand from these investors.

Through our network, we offer a range of customized securities and cash liquidity programs, which are tailored to individual customer needs. We currently offer support in more than 27 markets and deal with 120 counterparties. Our international customer base includes major international blue-chip financial institutions from within all market segments, including pension funds and asset managers, investment funds, large corporations, insurance companies, banks and brokers, and central banks/public authorities.

LMA key services:

• Securities Lending and Borrowing
• Cash Reinvestment
• Securities Lending Middle/Back Office In-sourcing
• SG Short Term Paper Programs
• Intraday Liquidity
• Foreign Exchange

Whether you need to cover short positions or lend all or part of a portfolio (fixed income, equities, convertibles, ETFs), we liaise with you to find the appropriate solution according to meet your needs.

Our added-value to our customers lies in our in-depth understanding of global markets and our ability to individually tailor services to meet your precise requirements.

SGSS’s global expertise in securities lending enables direct market access, and our customers benefit from appropriate market levels. The execution of lending and borrowing securities occurs through various means, SGSS can act as custodial/third party agent or principal, and takes into account pre-determined customer specifications.

We offer complete flexibility in the choice of required collateral: cash or securities, or a combination of both. Controls such as haircut levels, collateral quality, daily mark-to-market and margin calls allow for more than adequate coverage of potential market risks.

Our Front Office and Operations Department closely monitor dividends and corporate actions and a smooth process applies to recalls from borrowers when a holding is sold.

SGSS reinvests cash collateral to facilitate an optimum return through a large range of products in accordance with specified guidelines and limitations set by the customer.

The reinvestment process, as part of a lending program, is tailored to customers' needs in terms of the size of cash reinvestment, risk profile and duration, and according to our assessment of investment suitability. We offer an array of investment possibilities within various financial instruments, including:

• Time deposits
• Repurchase Agreements (including tri-party)
• Short Term Investment Funds
• Commercial papers
• Bonds

The SGSS cash reinvestment desk makes sure that a large part of the collateral is reinvested in overnight products in order to preserve the customer’s liquidity.

SGSS has the capacity to handle securities lending operations on behalf of the customer thanks to various existing processes dedicated to supporting third-party lending programs.

• Lendable inventory
• Trade recording and settlement
• Reconciliation (custody and borrowers)
• Recalls and substitution
• Collateral monitoring and Margin calls
• Income collection
• Corporate action

SGSS can provide alternative arrangements to the usual cash reinvestment programs through competitive reinvestment in SG paper.

SG Euro CT, a fully-owned and backed subsidiary of SG, markets these papers which are issued by the Société Générale. These Short Term papers have the SG Group rating. SG Euro CT is committed to buying back the underlying paper on the agreed date in the case of a fixed rate placement and at any time on a day-to-day basis in the case of a floating rate placement (indexed on EONIA).

SG Euro CT guarantees:

• An agreed yield at the time of the negotiation of fixed rate or enhanced EONIA placements
• The arithmetic mean of EONIA during the invested period of floating rate placements

These rates are agreed upon by customers for term trades.

With the integration of the French, Belgian and Dutch markets on the Euroclear Settlement of Euronext-zone Securities (ESES) platform, a unique settlement infrastructure for the three large Euronext markets has been completed.

The migration to the ESES platform has resulted in the netted system RELIT+ being abolished in favour of the real time system RGV. The management of the intraday liquidity has thus become essential for ensuring transaction settlement, which is now executed under the control of the customer’s individual purchasing power.

SGSS has an expertise and a dedicated team offering a full range of quality services on this activity. We offer a continued presence to facilitate the management of the purchasing power on the ESES platform. Our offer means the customer avoids liquidity shortages during the intraday settlement.

Our team monitors the purchasing power throughout the day and ensures the flow of activity. Each customer benefits from a tailored service thanks to a dedicated SGSS contact who is able to provide an adapted solution for customer needs as they evolve during the day.

Having a dedicated Foreign Exchange service also allows you, via an integrated and flexible offer, to meet the needs resulting from your securities activities.

We can offer you market access to handle your Spot, Forward and Swap transactions for a wide range of currencies while benefiting from the best conditions.

By allowing us to carry out automatically your Forex transactions in line with your securities instructions (settlement/delivery, coupon and dividend payments…) you will reduce your constraints and operational risks.

We are also able to hedge dynamically Forex exposures generated by funds that have more than one currency share class.

In addition, you can use our service to find a suitable solution to your FX requirements.