Global Investor Group: US firms seek greater control and transparency

US firms are demanding greater control and transparency from their stock loan programmes, and the need for a bespoke solution is on the rise, according to a fintech firm.

Sharegain, a securities lending fintech, has recently made its move into the US market and explains that firms in the region are demanding “greater control” over how their assets are lent.

Speaking to Global Investor, Boaz Yaari, founder and CEO of the firm, said: “We have found that firms in the US are seeking greater control, greater transparency and the valuable market data that lending activity can provide. They want a bespoke end-to-end solution and not simply a piece of software.”

Yaari highlighted that the trend towards internalised securities lending programmes is growing, as he pointed towards Fidelity and Invesco, noting that regulators view securities lending as an asset management function, therefore requiring supervision, knowledge and control all the way up to the board level.

On October 28, Sharegain announced the appointment of Susan Peters, former founder and chief executive of eSecLending, who was brought on to establish the firm’s business in the America’s.

Sharegain originally planned its US expansion at a later stage, but Yaari revealed that the firm had received a number of queries from large US financial institutions, as the Covid-19 pandemic has “focused people’s mind on the need for digital, automated platforms that are not dependent on manual processes”.

“The pandemic has presented us with the opportunity to explore that market. We already had the model and the technology, so now it is about scaling our offering internationally,” he said.

“A number of these firms, particularly the smaller ones, do not want to open a separate securities lending desk. But with the right solution, they can still participate in the market.”

Alex Ehrlich, who retired from Morgan Stanley at the end of 2019 after ten years as the bank’s global co-head of prime brokerage, was appointed to Sharegain’s board of directors in February.

This article originally appeared on the Global Investor Group website.