Sec Lending Gets New Tool

February 19, 2001 ( - A database which claims to be the first to provide the securities financing industry with a comprehensive and independent source of fair-value lending and financing rates for a large range of securities, has been launched by a UK financial analytics firm.

Reech Capital, said it launched SLMark,  the “first price benchmark curve” for securities financing, – which can be used by risk managers to integrate securities financing transactions, the company said.

The service has four members – UBS Warburg, Dresdner Kleinwort Wasserstein,  Merrill Lynch and Lehman Brothers – that will contribute pricing data confidentially to the service on a monthly basis.
The Internet-based SLMark uses a tenor-based curve to benchmark  prices for securities lending.  It does this by allowing market participants to calculate prices in order to provide “the same time picture” to which all members must contribute. That real-time benchmark is then updated whenever a member contributes a new transaction price, the company said.

The system then allows a fair value price to be calculated. The new service also provides forward and volatility information for the cost of borrowing he securities, according to the company.