Wednesday, February 22, 2012
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Frequently Asked Questions

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Click here to expand contentClick here to collapse content  Will I have to change my current operational procedures if I use LENDEQS?
No. Using LENDEQS will not require any changes to your current procedures. LENDEQS provides an electronic, screen-based system that will eliminate the need for phone calls and e-mails to borrow and loan securities.

You are in control of your trades; we will not impose an auto-return of loans, even in the event of rate changes. LENDEQS will notify customers of a rate change electronically and enable them to accept or decline the rate change by 10:30 am before the loan is recalled. You will be able to set a range of allowable rate variance in the system to automatically update loans.
 
Click here to expand contentClick here to collapse content  Do I have to change my custodian or other service providers if I use the LENDEQS platform?
No. LENDEQS is an overlay to current lending programs and does not require a change in our members’ custodian(s) or lending agent(s). Additionally, LENDEQS offers complete operational support to facilitate daily mark to market collateral adjustments, rate changes, recalls, returns and all other maintenance functions for the life of the loan.
 
Click here to expand contentClick here to collapse content  Are there any transactional charges or fees associated with membership?
No. LENDEQS membership is free to all DTC participant firms as well as all institutional beneficial owners of securities. Additional memberships can be furnished upon request. LENDEQS generates revenues by collecting a fee that is built in to the rebate rate of each transaction. That fee is clearly defined in the "LENDEQS Fee Schedule" tab on the application. There are no subscription fees and no hidden fees.
  
Click here to expand contentClick here to collapse content  What are the advantages of using LENDEQS?
To Lenders: All lenders of securities now have a real time source of rebate rate data to assess their current lending revenues. LENDEQS, unlike current data providers, also allows a lender to instantly lend shares to the highest bidder. With LENDEQS, Lenders receive better revenues per security by displaying their lendable assets to a broader range of borrowers. No additional intermediary or clearing member will be required to access the LENDEQS system.

To Borrowers: Short sellers and other borrowers of securities have real time access to large sources of liquidity. By removing barriers and directly connecting borrowers with a broader range of lenders, LENDEQS substantially reduces their costs to borrow.

LENDEQS will include a good-thru-date feature through which counterparties will agree upon the length of the loan. All market participants benefit from a more efficient market that makes ‘best execution’ a reality in securities lending. All market participants benefit from a more efficient market by having transparent rates and volumes from a wide range of counterparties in a central marketplace.

Click here to expand contentClick here to collapse content  Will lending impact my ability to trade?
No. Securities lending programs are designed to be transparent to your daily trading and investing activities.
  
Click here to expand contentClick here to collapse content  Are there issues such as voting rights, dividends and taxation that I need to consider by using the LENDEQS platform?
Using LENDEQS does not change current operational protocols with regard to voting rights, payment of dividends or taxation. The LENDEQS application allows for users to adjust accordingly for dividend flow-through, but we encourage all participants to refer to their custodian or agent for these matters.
  
Click here to expand contentClick here to collapse content  What protections do I have against counterparty risk?
LENDEQS uses a central counterparty to facilitate all trades. This counterparty acts as ‘principal’ and guarantees all transactions and will absorb any losses in the event of counterparty default. Please contact LENDEQS for details and to review the financial statements of our central counterparty. 

LENDEQS will offer the option of additional indemnification through the Options Clearing Corporation's Stock Loan Hedge Program.
 
Click here to expand contentClick here to collapse content  What services will LENDEQS provide to its users?
LENDEQS provides a transparent market to help facilitate price discovery, trade matching, settlement processing and contract maintenance. The platform automatically audits rebate reconciliation between its members, transmits mark to market payments through its central counterparty, enforces trading processes and procedures, and provides real-time market data services.
 
Click here to expand contentClick here to collapse content  Who are the LENDEQS participants?
Beneficial owners, custodial and agent lenders, prime brokers, traditional broker/dealers, hedge funds, and market-makers who directly participate in the existing securities lending market.
 
 

Service Offerings

  • Pension funds, mutual funds, banks, broker dealers or any other beneficial owner of securities can post their available portfolios on LENDEQS at no cost.
  • Entire portfolios can be instantly uploaded to the LENDEQS platform.
  • LENDEQS enhances the traditional revenue splits and acts as a complementary overlay to existing custodial lending products.
  • LENDEQS assists beneficial owners in monitoring portfolio lending returns.

Contact Us

30 Montgomery Street
Suite 1502
Jersey City, NJ 07302
(212) 425-8800