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Securities Lending: Topic, Technology, and Trends

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20 November 2006

Abstract

New York, NY, USA November 20, 2006

Technology focused on increasing transparency will be a boon to the securities lending market.

In a new report, , Celent reviews the technology landscape of securities lending. Securities lending was initially a back office function handled by large banks and broker-dealers. It is now a major front office department that occupies a prominent position in many broker and custodian offices. The securities lending market is expected to increase annually at a rate of 5% in the US and 10% for Europe. The lending market on loan refers to securities that are currently being lent through securities lending transactions.

Securities lending has been growing over the past five years due in part to technology innovations. There has been a significant increase in automated capability for securities lending. As a result, the market is more efficient, and trading has increased. This has been supported by demand from leading securities lending institutions that sought a variety of technology applications to support almost all aspects of securities lending. The different technology solutions have been grouped in the following categories: Trading and Auctions, Books and Records, Operations, and Performance Measurement.

"The advances in technology support the growth of the securities lending industry and more recently have supported regulations impacting the industry. There is clear opportunity for technology to continue to have a positive impact on securities lending," says Stephanie Gilmartin, analyst at Celent and author of the report.

The report begins with a definition of Securities Lending. A review of technology solutions available to the Securities Lending industry and an explanation of their roles in the market follows. Also included in the report is a case study analysis, which demonstrates how the relationship between EquiLend and Headstrong, a Securities Lending platform and securities focused technology services firm, have impacted the technology landscape of Securities Lending.

The 29-page report contains four figures and one table. A table of contents is available online.