Independent feels the squeeze
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Independent feels the squeeze

Securities lending

Larry Shearer

Leading industry players say the fledgling electronic securities lending market is in danger of being monopolised as SecFinex faces extinction. Their comments come as Deutsche Bank lends its considerable muscle to EquiLend, a platform that already has the backing of 10 of the largest industry players.

Securities lending has been one of the last areas of banking to lack electronic services. While fixed-income market makers and investors have been spoilt for choice, with platforms such as TradeWeb, MarketAxess, BondVision and Bondscape to name a few, securities lending has struggled to move away from more labour intensive methods.

EquiLend, an interdealer securities lending platform created last year, finally launched in June and is rapidly gaining volumes. SecFinex, an independent platform founded in 2000, doesn't have the same heavyweight backing and has had money troubles, forcing it to cut staff. Market players are divided about its future and smaller borrowers and lenders could lose out if it folds.

EquiLend has its critics but the industry agrees that it is at a distinct advantage while the prognosis for SecFinex does not look good.

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