The hard-to-borrow (HTB) securities lending market has lagged behind in adopting electronic trading technologies. Traders still rely heavily on manual workflows like phone calls and inventory lists to access HTB liquidity. This is an inefficient process, especially for mid-small cap names and special situations. Even in today’s digital era, electronic access to HTB securities remains a challenge.

What are some of the obstacles facing the HTB market? Outdated communication practices like phone tag undermine productivity. The lack of centralised HTB liquidity, particularly for niche assets, perpetuates manual workflows. These inefficiencies highlight the need for better solutions.

In response, dedicated digital platforms are emerging specifically for HTB lending. Developed with direct input from traders, these platforms aim to bring automation to this market. Intelligent protocols allow borrowers and lenders to match interests swiftly. 

By consolidating fragmented liquidity pools, these platforms offer electronic access to HTB assets across the spectrum. This spans prime broker inventory to specialised situations. Streamlined RFQ functionality also enables electronic negotiation of niche names.

Key benefits provided by HTB lending platforms include:

• Time savings through digitized workflow
• Expanded HTB liquidity across both mainstream and niche assets 
• User-friendly experience with embedded data and simple protocols
• Configurable integration with existing systems via API
• Detailed audit trails for governance and compliance

By embracing new technologies, HTB lending can move beyond phone calls and terminal screens. This has the potential to unlock huge efficiency gains for traders through automation. Ultimately, platforms purpose-built for HTB lending aim to propel this market into the digital age. This will empower participants with access, transparency and productivity.

Learn more about our Hard to Borrow module here or reach out.

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