xCube, a Dubai-based market making and brokerage platform, launched fully Automated Securities Lending and Borrowing (SLB) for retail investors, a first-of-its-kind in the UAE.
This market development will enhance and streamline trading activity on the Dubai Financial Market (DFM), allowing users to manage all aspects of the SLB process directly through the xCube application, removing the need to engage a broker.
SLB is a well-established practice in global financial markets where investors lend their securities holdings to others in exchange for a fee. This helps market participants to access securities for purposes such as short selling and hedging. By fully automating the process, xCube provides faster, more efficient transactions, and greater control for clients. The platform’s transparency ensures all fees are displayed within the app, creating a seamless and user-friendly experience.
By making it simpler, faster, more secure and affordable to access SLB, xCube is contributing to a more efficient trading experience on the Dubai Financial Market, complementing other services it offers such as swift and simple subscription to IPOs. Such initiatives are a key part of its mission to support the long-term health of capital markets by nurturing and empowering investors.
Hamed Ali, CEO of Dubai Financial Market, said: “Bringing Automated Securities Lending and Borrowing to DFM for the first time is yet another example of how we continue to enhance market accessibility. Securities lending and borrowing is already a crucial part of Dubai Financial Market and the automated service from xCube for retail investors will improve the efficiency and effectiveness of the service – making it faster, more affordable and more accurate to execute transactions, for both lenders and borrowers. We see Automated SLB as another significant stride in accelerating the development of UAE capital markets and cementing Dubai’s position as a global financial hub”.
Saad Chalabi, CEO of xCube, said: “Automated Securities Lending and Borrowing is a game-changer for DFM. Investors often seek to maximise returns from their securities portfolios. By offering automated SLB services, xCube enables retail investors to lend their securities to others in exchange for a fee all while maintaining instant access to their stocks should they want to sell them. On the other side, borrowers, including hedgers and other market participants, gain access to specific securities to hedge their portfolios, and implement strategic trading approaches all at the touch of a button”.
Automated SLB services offer many benefits to lenders, including additional streams of revenue, a streamlined lending process, and the freedom to sell securities at any time. The service also extends a wide array of benefits to borrowers, such as one click short selling, and a flexible margin framework, all integrated seamlessly for easy portfolio management.
Chalabi added: “In the longer term, automated securities lending and borrowing will help establish an anonymous, diversified pool of lenders, which is crucial for engaging borrowers and facilitating short selling. By providing essential hedging mechanisms, xCube is also enhancing the local derivatives markets, helping to bring the DFM in line with peers from developed markets. Automated SLB will not only support a more equitable financial landscape but will also aid the evolution of derivatives and structured products in the UAE. Our fully automated services mark a significant milestone for the UAE and reinforces xCube’s position as a pioneer in the regional securities industry”.