(Reuters) - EquiLend, a fintech at the heart of securities lending on Wall Street, said on Thursday it has secured a minority investment from an affiliate of U.S. banking giant BNY.
The securities lending industry enables investors to borrow and lend stocks, bonds and other assets to facilitate liquidity management and trading strategies.
Major banks, asset managers and hedge funds rely on securities lending to optimize portfolio returns and meet regulatory capital requirements.
EquiLend is partly owned by some of Wall Street’s biggest heavyweights, including Goldman Sachs, BlackRock (NYSE:BLK), JPMorgan Chase (NYSE:JPM) and Bank of America Merrill Lynch (NYSE:BAC).
BNY, along with eight other major financial institutions that hold strategic investments in EquiLend, will advise it on advancing innovation and improving efficiency in the industry, the fintech said.
"We are confident in EquiLend’s central role in the marketplace and plans to further redefine securities finance with innovative market infrastructure," said Nehal Udeshi, BNY’s head of securities finance.
The global securities finance industry generated $703 million in revenue for lenders in February, a report by DataLend, the market data service of EquiLend, showed earlier this month.
EquiLend, which was formed in 2001 by a consortium of global financial institutions and went live in 2002, provides securities finance technology and services.
It counts nearly 200 firms as clients, including asset owners, agency lending banks, broker-dealers and hedge funds.