April 2021

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The business of agency lending in securities lending is expanding. While all agents continue to support borrower needs for securities loans to ensure settlement and meet regulatory obligations, a portion of the market is offering a broader range of outsourcing services for Treasury and Peer to Peer operations. This may wind up changing the definition of what it means to be an agent lender.

This report presents the results of a survey of agent lenders conducted in February and March 2021. The report shows how agent lenders are delivering value to clients through communications and data access. A key finding is that agents themselves have a generally positive outlook on their business opportunities going forward, and that hiring has remained largely consistent through the last year. While securities lending has faced headwinds in 2020 and challenges remain, agent lenders themselves see dynamic growth opportunities going forward.

This report should be read by any market participant looking to understanding the current outlook of agent lenders. Regulators and asset managers may benefit from the agent lender perspective on how lending fits into the broader investment landscape. Technology firms may see opportunities for product development, and any beneficial owner with a vested interest in the securities lending market will find insights into how to maintain competitive positioning and work with their agent lenders. Finally, agent lenders may benefit from a peer level review of their businesses, especially as a section of the market expands to offer more diverse services.

Table of Contents

  • Executive Summary
  • Product Convergence and Business Model Diversity
    • – Methodology
  • Running the Business Under COVID-19
    • – Helping Clients Be Better Lenders
    • – Outlook for 2021
  • Technology Objectives and New Initiatives
  • Newer Routes to Market
    • – NSCC’s Securities Finance CCP
    • – Peer to Peer
    • – Clients and Regulation
  • Mid/Long Term Impacts of GameStop
  • Market Outlook for the Next Two Years
  • About the Author
  • About Finadium LLC

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