The Auction Process

Partnering to Design a Stronger Securities Lending Program

eSecLending engages in a consultative partnership with our clients to ensure stronger and more profitable securities lending programs.

We work closely with each client to build a comprehensive and well-considered program that optimizes returns within their individual guidelines and risk parameters. As a result, our lending programs generate:

• Optimal Returns — When compared to traditional programs our auction process captures a premium from:
  • Granting exclusive access to client assets for a fixed term
  • Segmenting portfolios in a manner which maximizes borrower demand
  • The competition inherent in a blind auction
  • No queue - utilization is optimized for each client
  • Individual trading strategies to maximize returns for each client
• Transparent Results for Lenders — Our process allows lenders to make unbiased award decisions based upon measurable results, which can be easily reported to management and Board of Directors
• True Comparison of Borrowers — Our auction process ensures that all borrowers are bidding on the same assumptions and terms, allowing for a valid, true comparison of borrower bids
• Ease of Implementation – As a result of efforts prior to the auction, program transition and implementation of exclusive agreements occur quickly and efficiently

Lending through exclusive arrangements is not a new way of lending. It is a well-established route to market utilized by a broad range of institutional lenders. For certain types of portfolios, particularly global equity and certain fixed income portfolios, exclusive borrowing arrangements can offer a significant return advantage versus custodial programs. Our ability to efficiently administer multiple exclusive arrangements simultaneously helps to optimize program returns within the lenders individual risk tolerances.

Why Auction via eSecLending?

We have more experience managing and administering principal auctions than any other provider in this industry. The expertise and experience we have developed over the years allow us to deliver clients the best in program design, execution and administration.

• Experience – We have more experience and expertise in managing and administering exclusive principal auctions than any other provider in the industry. Because of this, we are a recognized industry leader.
• Independence – We are not affiliated with any borrowers and do not run a traditional agency program where existing market levels or borrower relationships could affect auction pricing.
• Specialization – Portfolio auctions are the primary focus of our business. We believe in the auction model and are committed to managing a multiple exclusive environment on behalf of our clients without traditional agency queue or existing borrower relationship conflicts. In addition, our process was designed specifically to support multiple exclusive borrowing arrangements. This means we do not need to adapt legacy systems and processes that were designed to support a different process.

How Our Auctions Work

The auction process takes approximately six to nine weeks to complete.