The Purple Issue XV

As the second quarter ends, EquiLend Data & Analytics looks back on the performance of the securities lending market during an eventful three-month period.

The T+1 settlement cycle, implemented in the US on 28th May 2024 and in Canada on 27th May 2024, has sent ripples through the financial system, and the world of securities lending is no exception.

The first half of 2024 offered a host of trending securities which helped drive volumes and ultimately revenue in the securities finance market.

The new and improved Data & Analytics User Interface has been designed with client feedback in mind, delivering a user-friendly UI which provides access to more data than ever before.

In the decade since DataLend launched, the regulatory landscape of the securities finance industry has changed dramatically with MIFID I and II, CSDR and SFTR adding greater transparency across the sector.

The APAC region has been a hot topic for the securities lending industry for many years, with markets in the region being characterized by varying tax treatments, settlement requirements, collateral margins, and short selling restrictions.

A sleepy IPO market is beginning to stir; DataLend looks at the impacts of IPOs in securities lending.

As the second quarter concludes, we can reflect on an eventful first half of 2023 marked by a banking crisis, a resurgence in meme stock activity and persistent interest rate hikes to battle global inflation.

Standards and accuracy are important factors in any data offering, but especially when using this data to measure performance and understand revenue relative to peers.

Equities market performance has been something of a pleasant surprise in the first half of 2023. In the U.S. market, the S&P 500 closed out the 2nd quarter roughly 16% higher than its mark from the start of the year.

In his June 21, 2023, testimony before congress, Federal Reserve Chair Jerome Powell referred to the central bank’s view of bank-run mechanics as “outdated.” His comments, which sought to address the events leading up to Silicon Valley Bank’s collapse, allude to the fact that today, the genesis of financial panic is more likely to come from message boards than board rooms.

Kickstarting in mid-March 2023, NGT, EquiLend’s renowned trading platform, launched an exciting new workflow for clients – Competitive Bid. In an effort to drive greater automation in the specials market, Competitive Bid allows both Lenders and Borrowers to indicate hard-to-borrow flags when they initiate trades.

In a volatile macroeconomic environment, the fixed income market continued its robust securities lending performance in Q1 2023, generating $666 million in revenue, up 25% YoY. The period continued to be characterized by rising interest rates and inflation, forcing fixed income yields up and presenting an opportunity for directional trading.

The Data and Analytics division of EquiLend has observed many revenue-impacting corporate events in recent years; Naspers in 2021 and 3M last year, to name a few.

The collapse of Silicon Valley Bank sent shockwaves throughout both the U.S. and global financial sector. While the 2023 banking crisis will likely not be a watershed of the same magnitude as the collapses of 2008, it was a true test of the system and unsurprisingly had a significant impact on the securities lending market.

The WISF organization marked its 5th anniversary in 2022 by ringing the bell at the New York, Toronto and London Stock Exchanges, a momentous milestone and an important signal for any woman considering a career in the securities finance industry.

With the last chapter of 2022 now written, volatility is beginning to feel like one of the only things investors can count on in an age of seemingly continuous market turbulence.