State Street launches a managed peer-to-peer securities finance product

Direct access lending enables direct, principal loans between lending and borrowing clients

STATE Street Corporation announced on October 11 the launch of direct access lending, a securities finance product that enables direct, principal loans between its lending clients and its borrowing clients.

The new managed peer-to-peer product will leverage the size and strength of State Street’s agency lending and enhanced custody programs, and underscores a continued focus on aligning solutions and technology across State Street to help clients achieve their objectives.

To facilitate the direct lending transactions, State Street will leverage both its agency lending and enhanced custody programs to offer both sets of customers the benefits of each program required to operate in a peer-to-peer transaction while also enjoying an economic benefit associated with direct access loans.

The product offers a seamless peer-to-peer model, supported by the operational efficiency and expertise of a managed securities lending program.

“Over the last decade, we have worked hard to manage balance sheet constraints across banks and broker/dealers participating in securities lending,” says Martin Tell, global head of securities finance.

“State Street has created a number of innovative solutions to support our clients, expanding our program to add new markets and collateral types and diversifying methods for borrowers to post noncash collateral by pledging securities instead of a title transfer. With this prior innovation and development, we are uniquely positioned to create a peer-to-peer securities finance platform given the scale and sophistication of the agency lending and enhanced custody businesses that we run today,” he adds.

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