The securities lending market, despite its critical role in facilitating short selling and providing liquidity, remains encumbered by inefficiencies due to the lack of modern platforms. Many participants still rely on manual processes, such as sharing inventory lists via phone calls and trading terminals, which hinder productivity and limit access to liquidity. The absence of digital platforms leads to reduced transparency, limited price discovery, and suboptimal trades.

Furthermore, the fragmented nature of the market compels participants to navigate multiple channels and engage with numerous counterparties, resulting in increased operational risks and administrative burdens. This fragmentation makes it challenging for traders to efficiently locate and secure the desired securities, leading to missed opportunities and missed opportunities.

To address these inefficiencies, the securities lending market needs comprehensive digital platforms, which should offer automated workflows that streamline the entire lending process, from locating inventory and negotiating terms to executing trades and managing post-trade activities. By digitising these processes, participants can save valuable time, reduce manual errors, and focus on higher-value tasks.

An effective platform should provide a consolidated view of liquidity across various market segments, including general collateral, in-demand specials, illiquid mid-small cap names, ETFs, corporate bonds, and special situations. This comprehensive coverage would enable borrowers and lenders to access a broader range of opportunities and optimise their trading strategies.

They should incorporate smart negotiation protocols and RFQ functionalities to facilitate efficient communication, term negotiation, and trade execution in a transparent and auditable manner. These features can help accelerate the matching process between borrowers and lenders, ultimately improving market efficiency.

To ensure seamless integration with existing systems and processes, these platforms should offer flexible connectivity options, such as APIs, to allow participants to easily integrate the platform into their own trading infrastructures and benefit from real-time data flows and straight-through processing.

If you’re looking to take your securities lending operations to the next level and capitalise on the opportunities presented by a digital marketplace, Wematch can help you unlock new levels of efficiency, transparency, and growth in your securities lending business. 

To learn more, reach out.

Photo by Joe Eitzen on Unsplash

The views and opinions expressed are for informational and educational purposes only as of the time of the writing/production and may change at any time. The material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.