May 2024

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Market participants are assessing multiple new options for securities finance execution and post-trade processing. While discussions were active in 2023, user attention was focused by the EquiLend outage in early 2024. There is now a much greater incentive to take action, driven in part by regulatory concerns for robust Business Continuity Plans specific to securities finance.

As users sort through new platforms, they must also consider what they want from a future securities finance market structure. Securities finance is a balance sheet business and must compete for allocation with repo, Total Return Swaps and other products. Market participants want to see how execution venues will help them be efficient, drive liquidity and build the securities finance model going forward.

While there are multiple reasons to connect to new venues, there is a longer list of business considerations that slow decision making. Internal procurement and cybersecurity teams have taken a greater role in the discussion. Some firms expect that their onboarding process with a new vendor will take just a few months while others are looking at a year or more. They must also project what liquidity will be on a new platform when they finally arrive.

This report is a survey of securities finance market participants on what they think about new execution venues, the factors that are driving their decisions and what will hold them back. The report provides ideas about budgets, vendor pricing, internal product development and market innovation.

This report should be read by any party interested in the future of securities finance execution and post-trade processing.

Table of Contents

  • Executive Summary
  • The Opportunity for Competing Execution Platforms
    • – Methodology
  • Top Reasons to Connect
  • Business Considerations and the Approval Process
    • – What Does “Execution Platform” Even Mean?
    • – Automation and Post-Trade
    • – Regulatory Oversight
    • – Budgets to Build Out
    • – Vendor Pricing
  • Opportunities for New Product Development
  • About Finadium LLC

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