Products September 16, 2009

S&P Introduces SecLending Indexes

September 16, 2009 (PLANSPONSOR.com) - Standard & Poor's Index Services has launched what it says is "the first ever public index series designed to measure the average cost of borrowing U.S. equities."
Reported by

According to a press release, the S&P Securities Lending Index Series seeks to reflect the average securities lending rate for the constituents of the S&P 500, S&P MidCap 400, S&P SmallCap 600, and the underlying GICS sector sub-indexes for all three leading U.S. equity benchmarks. In order to be classified as an eligible security in the S&P Securities Lending Index, a company must be a constituent of the related equity index.

Index constituents must also have a consistently available aggregate weighted average securities lending rate and are then weighted based on their respective weight in the related equity index. The index undergoes a daily rebalancing to adjust for all constituent and weighting changes that occur in the related equity index.

The indexes are designed to measure the securities lending rates associated with loans at the intermediary level, typically between custodians and prime brokers. These are private transactions that take place before loans are made to end-borrowers such as option traders, hedge funds, and other asset managers.

The announcement said a white paper on the Securities Lending Industry can be accessed by going to www.indexresearch.standardandpoors.com .

More information on the S&P Securities Lending Index Series is at www.standardandpoors.com/indices .

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