Quadriserv, a provider of technology and business model solutions to the securities lending industry, has partnered with The Options Clearing Corporation to operate a centralized securities lending platform.
The Options Clearing Corporation (OCC) would provide clearinghouse services for all securities lending transactions submitted through Quadriserv’s AQS securities lending platform bringing market structure, transparency and efficiency to borrowers and lenders of securities.
According to the company, AQS will operate an electronic, centralized securities lending platform for domestic equities, for which OCC would act as the central counterparty to all securities lending transactions matched on the AQS platform. AQS will match lenders and borrowers using a hybrid auction and continuous price discovery mechanism.
The resulting matched loans would then be processed through the OCC, which would provide central counterparty guarantees and anonymity. Post-transaction reporting capabilities would include real-time reporting of executed transactions, stock and cash movements through the Depository Trust Company, as well as record keeping and reporting via industry standard formats, added Quadriserv.
Bruce Turner, COO of Quadriserv, said: AQS’s two-year development effort was accomplished in collaboration with industry participants including custodial lenders, agent lenders, prime brokers, traditional broker/dealers, hedge funds, market makers, regulators, academics and industry leaders. This work is culminating in what we believe to be the best possible model to service the future of the securities lending business by reducing systemic risk and enhancing transparency and marketplace efficiency. We look forward to commencing initial operations of this industry utility in early 2009, with market-wide testing beginning imminently.