SunGard (NYSE:SDS) announced today that it has launched a new Web-based Agency Lending Disclosure of Principal communications hub and management service for processing principal lender and counterparty information between agent lenders and broker/dealer borrowers, as part of an industry-wide initiative to help increase transparency in agency securities lending.
Available to all industry participants, SunGard's new turnkey Securities Finance Disclosure (SFD) offerings were designed to meet and exceed Agency Lending Disclosure Task Force guidelines for enabling borrowers to approve the principal lenders used through agency lenders.
"SunGard's new Web-based service for this important disclosure initiative provides integration with any industry participant's existing infrastructure, helps to reduce development and technical overhead costs, and facilitates enhanced processing efficiencies for SunGard customers using Global One, Loanet and WorldLend," said Brian Traquair, president, securities finance, SunGard.
SunGard's SFD Hub allows for the exchange of principal data between agent lenders and broker/dealers. In addition, SunGard offers connectivity to The Depository Trust Company's (DTC) SMART/Track for Agency Lending Disclosure service to facilitate the exchange of data between firms that wish to use DTC as the connection point. This month, SunGard will release new Disclosure modules for its Global One and WorldLend customers, which will provide a turnkey solution for lenders to control and distribute their agency lending information for Disclosure. Users of SunGard's new SFD services are not required to use its Global One, Loanet or WorldLend securities lending platforms in order to take advantage of the new services.
SunGard's SFD Management application allows both agent lenders and broker/dealers to manage the key elements of SFD processing by establishing parameters for the exchange of the incremental, borrower response, and master files. In addition, the SFD Management application is made available to broker/dealers' credit, risk management, and regulatory/compliance departments separately from their securities lending operations.
SunGard's SFD services became available to industry participants on July 1 in conjunction with the Task Force's phase 1 pilot production target date. The full production implementation of phase 1 will begin on August 1 and continue through November 1, when agent lenders will be required to confirm that a principal lender has been explicitly approved by a broker/dealer before adding a new contract. The second phase of the industry initiative is scheduled to begin testing in September with production deployment estimated for the end of February 2006. The second phase will include the passing of daily loan rate data from agent lenders to broker/dealers, consolidated risk reporting by principal lender across agent lenders, and computation of capital charges by principal lender.