Sec lending costs spike following Brexit

Securities lending costs have been affected by June’s EU referendum
By Paul Walsh
The result of Britain’s EU referendum led to large jumps in securities lending according to statistics from DataLend.

UK bank stocks fees jumped 200% from an average of 25 base points (bps) on 23 June to a high of 75 bps on 28 June.

Volume weighted average fees to borrow equity securities rose slightly from 48 to 51 bps in the days immediately following the vote with utilisation seeing a small increase from 6% to 6.5%.

Other figures saw fees to borrow UK financial services stocks jump from 40 bps to 61 bps in a matter of days on significant volume.

Speaking at the GC leaders panel last week European securities services were quick to downplay predicted catastrophic effects of Brexit.

Citi’s global head of custody and fund services, Sanjiv Sawhney, suggested that they were “prepared for worse” and that “things went more seamless than anticipated”.