The US securities finance market, despite its significant role in facilitating short selling and providing liquidity, has long been hindered by inefficiencies caused by outdated systems and manual processes. Many participants still rely on legacy methods, such as sharing inventory lists via phone calls and trading terminals, which limit productivity, reduce transparency, and restrict access to liquidity. The lack of modern, centralized digital platforms leads to suboptimal trades and missed opportunities.

Moreover, the fragmented nature of the US market forces 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 potential losses.

To address these inefficiencies and modernize the US securities lending landscape, the adoption of advanced securities finance platforms is crucial. These platforms 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 digitizing 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 optimize their trading strategies.

Furthermore, a robust platform 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 and reducing costs.

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

Wematch, a leading provider of cutting-edge securities finance solutions, has recently obtained FINRA registration and expanded its reach in the US market. With a client-centric approach and deep domain expertise, Wematch is well-positioned to help US financial institutions modernize their securities lending operations, unlock new efficiencies, and stay ahead of the curve in an increasingly competitive landscape.

To learn more about how Wematch can transform your US securities lending operations, go to wematch.live/us.

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.