Securities Lending

STOCK LOCATES AND securities lending

Velocity Clearing specializes in providing stock locates and securities lending services in the hard-to-borrow securities universe. While the process for easy-to-borrow securities is simple and seamless, the hard-to-borrow universe is a bit more complicated. Navigating this universe on behalf of our clients is our forté.

Easy-to-Borrow Securities

The process of obtaining locates on easy-to-borrow securities is simple and seamless. The Firm provides an easy-to-borrow list to the trading systems of our clients in the early hours of the morning, allowing clients to transact in these securities throughout the day, without any intervention.

Hard-to-Borrow Securities

The hard-to-borrow securities locate process is relatively more complicated. However, the Firm has made this process as seamless as possible for its client base. The Firm has worked with a number of trading systems, used by its clients, to integrate a button into the front end. Should the client require a locate on a hard-to-borrow security, all they need to do is choose the Velocity Clearing name in the drop down and send a message requesting the specific locate. This request will be sent to the Velocity Clearing proprietary locate system (“Velocity Locate System or VLS”) via either Financial Information Exchange (FIX) protocol or JSON:API which will in turn respond with an approval or denial. If the locate is approved, the order will then be forwarded directly to the execution venue as chosen by the client. This all happens extremely efficiently with minimal latency. Besides the initial order placement and request for locate, the client need not do anything else. Because there is no human intervention, the VLS provides all clients with an equal opportunity to acquire stock on a first come, first serve basis with no bias.

Securities Lending and Borrows

For those clients that prefer traditional formats or are trading on systems that have not as yet been integrated with the VLS system, the Firm offers access to locates via its website which connects you direct to the stock loan desk. An industry standard Loanet system is used to process securities lending transactions. The Firm has also developed its own Securities Lending System, a proprietary solution that allows us to efficiently manage the costs and rates of securities lending and borrows. This typically translates to financial benefit for our clients. In addition to industry-standard overnight borrows, we selectively offer our clients term borrows on a subset of securities. Term borrows offer clients with protection on the rate and term of the borrow and minimizes recall risk. Finally, Velocity Clearing utilizes a robust risk management infrastructure to manage counterparty risk. Detailed, exception-based risk reports enable us to optimize credit lines of our counterparties, gain access to more securities, maximize the capital of our firm, and optimize our borrow and locate capabilities. Access to securities locates and securities borrowing services is what sets us apart from the other firms. The unfortunate reality is that the larger firms rarely provide smaller clients with the same level of service and resources as they do to their larger clients. In many cases, these smaller clients don’t realize they’re being neglected. The smaller clearing firms are too stretched or do not have the systemic and / or technological expertise and infrastructure in place to support their clients. At Velocity Clearing, with our strong financial base, experienced personnel, and substantial technological infrastructure, we have the wherewithal to support our clients’ needs to the fullest. We treat every client as a partner and provide them with access to our full technology suite and the experience of our team.

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