The future of the securities lending market
Explore our view of the ideal form for the lifespan of a securities loan. Each key part of the lifecycle is explored in detail in our white paper.
Pre-contractual
A new counterparty would easily provide relevant information for KYC/AML/onboarding purposes through data held centrally and kept up-to-date. It would be automatically captured and stored electronically so that it can be easily transferred into individual institutions’ systems and used for various onboarding needs.
Contractual (master agreement / loan)
Negotiation and execution of legal documentation would take place on an electronic platform with an ability to easily apply or disapply standardised and industry-recognised drafting, as well as to check the documentation against applicable legal requirements. Booking of a loan would take place automatically based upon agreed market practice/conventions.
Again, relevant information would be automatically captured and stored by the electronic platform so that it can be easily transferred into individual institutions’ systems and used for a variety of internal and regulatory needs, such as credit assessments.
Allocation
Where a bulk or pooled lending structure is used, allocation and communication of allocation to the borrower would take place swiftly and automatically after execution of the loan. Again, relevant information would automatically be captured and stored electronically so that it can be easily transferred into individual institutions’ systems and used for onwards internal consumption.
Commencement
The delivery of the loaned securities and, potentially, collateral at the outset of a loan can again be a more manual process than is necessary. It would be possible to develop a single, common digital representation of this event (as well as other life cycle events), which would feed off of data electronically captured through more integrated, standardised processes.
Performance / Enforcement
The data captured in the initial stages (and kept up-to-date throughout the life of the loan) would feed automatically into middle- and back-office systems set up to manage termination and ensure consistency of approach across the parties to the loan. This event would also be represented by a common digital representation.
Termination
The data captured in the initial stages (and kept up-to-date throughout the life of the loan) would feed automatically into middle- and back-office systems set up to manage termination and ensure consistency of approach across the parties to the loan. This event would also be represented by a common digital representation.Download your copy of the report
The Future of the Securities Lending Market: An Agenda for Change
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Key Contacts
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