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Fidelity Targets Securities Lending
Mutual-fund company Fidelity Investments is setting itself on a collision course with rivals by rolling out a pricing service designed to make the roughly $800 billion market for securities lending more transparent, according to people familiar with the firm's plans.
In securities lending, money managers lend out stocks and bonds, frequently to short sellers, collecting a fee for the service. The short sellers, who want to bet against the securities, sell them, hoping to buy them back later at a lower price and return them, pocketing the difference as profit.
Bloomberg News
Fidelity is launching a pricing service designed to make the market for securities lending more transparent.
Mutual funds, pension funds and other big asset managers long have engaged in securities lending from the portfolios they manage for investors. But the industry is dominated by big custodial banks that provide safekeeping of financial assets, such as Bank of New York Mellon Corp., BK +2.15% State Street Corp. STT +1.71% and Northern Trust Co., NTRS +1.78% as well as by investment banks like Goldman Sachs Group Inc. and J.P. Morgan Chase JPM +3.02% & Co.
