U.K. Regulator Approves MTF For Securities Lending Market

The Financial Conduct Authority in the U.K. has given a new electronic marketplace in the securities lending and borrowing market (SBL) the go ahead the to start its commercial operations across 17 European capital markets.
By Janet Du Chenne(59204)
The Financial Conduct Authority in the U.K. has given a new electronic marketplace in the securities lending and borrowing market (SBL) the go ahead the to start its commercial operations across 17 European capital markets.

In parallel with the announcement, SL-x has also appointed Chris Fay as managing director for Europe, with immediate effect.

SL-x Trading Europe will operate as a multilateral trading facility (MTF). The successful completion of SL-x’s discussions with the FCA means that the company will shortly offer SBL market participants access to its online trading system, “which will enable transactions to be centrally cleared, thus creating significant operating cost savings by enabling participants to reduce the levels of capital they must hold to satisfy regulators, and to increase trading efficiency,” says SL-x. The offering, which is expected to launch in the Spring, ran months behind SL-x’s original schedule while the regulatory process unfolded. 

Initially centrally-cleared stock loans will be offered by SL-x to equity markets in Belgium, Germany, and the Netherlands, while an additional 13 European markets will be able also to trade via SL-x on a bilaterally-cleared basis. Later this year SL-x plans to extend its operations to include the U.K., Switzerland, and the U.S.A., subject to regulatory approval. 

Announcing the FCA approval the co-founder and CEO of SL-x, Peter Fenichel, says: “This is an important day both for our young business and for the SBL market. Technology continues to transform the global capital markets industry, increasing operational efficiency and enabling managements to monitor and control risk much more efficiently, to the benefit of all market participants. Our operational launch marks the start of an exciting new era for the SBL market, and we look forward to working with our commercial partners to help them make the market one of the most efficient parts of the capital market industry.”

Commenting on Fay’s appointment, Fenichel says: “He brings very relevant experience which I am sure will prove extremely valuable as we move SL-x from its start-up phase into a fully operational international capital markets business.’ Fay has nearly 25 years’ experience in the capital markets industry, having worked for JP Morgan, Bank of New York, Merrill Lynch, and Wells Fargo. He also worked at SecFinex, the former securities lending MTF, where he and Fenichel were colleagues.

Headquartered in the City of London, SL-x currently has offices also in New York. It was founded in 2011 by Peter Fenichel together with the current SL-x Chief Technology Officer, Nazaar Molokhia, and the current chief operating officer, Hank Mlynarski. It is owned by its management and staff and by Palamon Capital, a U.K.-based private equity firm which specializes in investing in pan-European high-growth businesses.

See GC’s article on SL-x from the Winter issue.

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