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EquiLend reports that 2021 was a record year for its securities finance trading business, generating its highest annual trading volumes in a number of categories and driving double-digit growth in volumes in all regions apart from the Asia Pacific (which rose 7 per cent).
This period delivered the EquiLend’s strongest annual trade volumes to date, with notional value rising 12 per cent over 2020.
The global securities lending market generated US$9.28 billion in revenue during 2021 on the back of favourable market conditions, according to DataLend, the company’s market data arm.
Mike Norwood, EquiLend global product owner for trading services, indicates that rising equity markets and high volatility levels triggered greater activity across its full suite of trading activities.
EquiLend’s clearing services loan market reported a 43 per cent increase in client activity over the year, with volumes spread across exchange-traded funds, high-rate GC and hard-to-borrow trades, with a heavy focus in meme stock and special purpose acquisition company (SPAC)-related activity.
Trading volumes in ETFs rose 30 per cent YoY on the NGT platform. Fixed income trading volumes also rose, with corporate debt trade volume up 30 per cent YoY.
Having delivered significant advances in automation in GC trading for lender-to-borrower activity, Norwood indicates that EquiLend is committing technology investment to bring non-GC and broker-to-broker flow into a more digital environment. This investment is already translating into strong trading volumes in these areas during 2021.
This rise in non-GC trading activity on NGT was evidenced globally, with the number of unique securities trading at above 50bps rising 15 per cent during 2021.
“NGT’s gains of over 40 per cent signal a more robust market for electronic trading as well as the composition of securities eligible for electronic trading shifting to incorporate more of our clients’ overall books,” says Norwood.
The EquiLend Swapimization service for equity total return swap (TRS) trading has continued to attract new clients and the company aims to develop the service to support the planned launch during Q1 of a organised trading facility (OTF)-compliant offering to complement the existing US and multilateral trading facility (MTF) platforms.
“As a product, we welcome [this] diversification and will continue to invest in platform improvements to reflect trading behaviour and encourage automation and straight-through processing across all trade types,” says Norwood.
EquiLend has now launched its Settlement Monitor service to support clients in sharpening their settlement efficiency for SFTs and meeting their settlement discipline obligations under the EU Central Securities Depositories Regulation (CSDR).
See the interview with Iain Mackay, EquiLend’s head of post-trade, in SFT Issue 295, published today.
