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ETF in securities financing

Organisations that routinely need to borrow shares and bonds include hedge funds, investment banks and brokers. All three already use ETFs. But the popularity of ETFs in securities lending is growing.

ETF lending can provide access to parts of the market that traditional long-only investments can’t. It can also provide extra income.

Our pioneering work on the international ETF structure is helping:

  • Agency lenders to locate more ETFs for use
  • The market eliminate settlement fails that occur where clients lack the right securities in their account by borrowing:
    o Automatically from a large lendable pool made available by other clients
    o Only what is needed to match your settlement instructions

Use of ETFs as collateral
Our International ETF structure is supporting the growing demand to use ETFs as collateral in increasing as:

  • Non-cash collateral becomes more attractive to risk-taking financial institutions
  • Banks look for balance sheet and capital efficiency to meet their liquidity needs

 

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