Sidebar: Exclusives: Right For You?

IBM will not confirm it, but sources say that Big Blue's defined benefit plan has begun direct-lending relationships with a handful of broker/dealers, a practice known as using "exclusives." This is not new-Street firms have long desired to break the hammerlock that custodian banks traditionally have had in securities lending, and have been successful in persuading some insurance companies and large pension pools to bypass their custodians and lend directly to them. However, IBM's decision ups the ante somewhat, securities lending insiders say.

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