Fidelity Capital Markets launches a securities lending pricing tool
13 August 2012 Boston
Image: Shutterstock
Fidelity Capital Markets’s prime brokerage division, Fidelity Prime Services, has released PB Optimize, a securities lending pricing tool that displays, compares and ranks securities lending rates and performance from prime brokers.
Fidelity Prime Services handles securities lending, execution, financing, reporting, clearing and custody for institutional investment managers, including hedge funds, which primarily employ long and short equity trading strategies.
Its PB Optimize is the “first securities lending pricing tool of its kind” to be offered by a prime broker, said the company in a statement. It is available to Fidelity’s hedge fund clients at no additional cost.
PB Optimize provides managers with three customised modules to help them to realise efficiencies and cost savings in the securities lending market.
A broker scorecard module “gives clients the ability to evaluate short balance allocations and prime brokers’ stock loan performance”. Region, sector, market capitalisation and how quickly rates change determine prime broker performance.
Hedge fund clients can also research and graph securities lending rates and lendable quantity information over user-defined time series, and a cost analysis module alerts clients to rate optimisation opportunities across prime brokers to find potential cost savings.
Markit is providing PB Optimize with independent securities lending data, including the quantity that is available to be borrowed and on loan.
“PB Optimize is the latest example of Fidelity’s long-standing commitment to bringing transparency to the marketplace, including securities lending fees charged by different prime brokers,” said Thomas Tesauro, executive vice president of Fidelity Prime Services. “By sharing Fidelity’s lending rates alongside those of other prime brokers we are putting our clients and their investors first, empowering them to make more informed decisions. We expect this tool will ultimately drive market efficiency, benefiting hedge funds as well as investors.”
“Using PB Optimize has improved the accuracy and efficiency of our rate discovery process,” said Adam Nemser, head trader at Southpoint Capital. “Furthermore, it has enabled us to better analyse how our rates change over time across multiple prime brokers, improving our ability to compare the quantitative and qualitative aspects of these relationships.”
Tesauro added: “Investors want to know that the firms with whom they’re investing are making financing decisions on their behalf based on the best possible data and analysis,” said. “Any tool that drives transparency is good for investors and for the market as a whole.”
Fidelity Prime Services handles securities lending, execution, financing, reporting, clearing and custody for institutional investment managers, including hedge funds, which primarily employ long and short equity trading strategies.
Its PB Optimize is the “first securities lending pricing tool of its kind” to be offered by a prime broker, said the company in a statement. It is available to Fidelity’s hedge fund clients at no additional cost.
PB Optimize provides managers with three customised modules to help them to realise efficiencies and cost savings in the securities lending market.
A broker scorecard module “gives clients the ability to evaluate short balance allocations and prime brokers’ stock loan performance”. Region, sector, market capitalisation and how quickly rates change determine prime broker performance.
Hedge fund clients can also research and graph securities lending rates and lendable quantity information over user-defined time series, and a cost analysis module alerts clients to rate optimisation opportunities across prime brokers to find potential cost savings.
Markit is providing PB Optimize with independent securities lending data, including the quantity that is available to be borrowed and on loan.
“PB Optimize is the latest example of Fidelity’s long-standing commitment to bringing transparency to the marketplace, including securities lending fees charged by different prime brokers,” said Thomas Tesauro, executive vice president of Fidelity Prime Services. “By sharing Fidelity’s lending rates alongside those of other prime brokers we are putting our clients and their investors first, empowering them to make more informed decisions. We expect this tool will ultimately drive market efficiency, benefiting hedge funds as well as investors.”
“Using PB Optimize has improved the accuracy and efficiency of our rate discovery process,” said Adam Nemser, head trader at Southpoint Capital. “Furthermore, it has enabled us to better analyse how our rates change over time across multiple prime brokers, improving our ability to compare the quantitative and qualitative aspects of these relationships.”
Tesauro added: “Investors want to know that the firms with whom they’re investing are making financing decisions on their behalf based on the best possible data and analysis,” said. “Any tool that drives transparency is good for investors and for the market as a whole.”
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