Finding the best rates for longs and shorts will be easier with a new securities lending price-discovery service.
That’s the claim of securities lender Quadriserv, which has now introduced Automated Equity Finance Markets, or Aquas. Aquas is a secure Web application with which stock lenders and borrowers can use historical data to benchmark borrowing and lending rates.
An extension of Quadriserv’s ProQure platform, Aquas is primarily designed for hedge funds. They rely on their prime brokers but often don’t know if they are getting the best rebate rates when they lend or borrow stock.
But Aquas, says a Quadriserv official, will provide comparisons. Rick Geisman, director of sales, says a hedge fund uploads a portfolio onto Aquas along with a rebate rate.
“They will then get a pricing matrix from strategic providers, such as prime brokers or brokers without prime broker operations. This gives them a level of price discovery into the securities lending market,” Geisman says.
Securities lending, Geisman adds, is opaque. The only way to overcome this is by contrasting rates. Some hedge funds with multiple prime brokers do that, while others can’t, he says. “Aquas provides a portal to clients where a user can see all of their short rebate rates from prime brokers in one central place and compare rates to unique providers of pricing and availability,” he says.
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