Securities Lending

"on the global map, Morgan Stanley remains the Biggest and Best Borrower"

Morgan Stanley has one of the largest and most experienced securities lending teams in the market, with a comprehensive understanding of all fund strategies and of the needs of different clients ranging from small boutiques to large institutions. From this team each client is allocated a senior coverage and back-up trader who act as the primary point of contact for all stock lending, swap and yield enhancement enquiries. Working from one global stock loan availability book, the securities lending team can provide 24-hour business day coverage for clients that trade across time zones.

As one of the largest securities borrowers and lenders in the market, Morgan Stanley has a depth and breadth of supply that is second to none. Being one of the largest securities borrowers allows Morgan Stanley not only larger allocations of "hot stock" portfolios, but also minimises the events of stock recall for our clients.

Having pioneered the model of "exclusive" access to lend stock portfolios, Morgan Stanley has built up a large and diversified pool of exclusive assets which have enhanced supply stability and reduced the risk of stock recall. By targeting small to mid-cap and special / hard name portfolios, Morgan Stanley aims to add securities which are of particular value to our client base. In addition Morgan Stanley has a dedicated "hot" stocks team which focuses on locating stock supply from unconventional lenders.

By focusing on product innovation, Morgan Stanley is constantly enhancing its securities lending service by adding stock supply for new stock loan markets or by developing synthetic structures where traditional securities lending is not available.

Morgan Stanley has developed technology solutions to support different trading styles. For clients that require automated borrowing, the "LSSS" Long Short Strategy Sourcer allows clients to trade with the knowledge that their stock borrows will be automatically booked to their accounts. For clients that like to locate stock via the internet, "Stock Loan on-line" provides a secure web based connectivity tool that provides real time availability and short sale approvals.

Working with industry leading technology, the securities lending team can instantly identify market trends and changes in stock demand and supply. They can measure the diversity and stability of borrowed positions thereby optimising the management of the overall securities lending book. Specific tools can also identify trading opportunities and suggest pricing across several trading strategies and product lines. Using these tools the securities lending team provide a "daily" and "end of day" market summary which provides market "colour" for each trading region.

Risk management is a key element of the securities lending service, whether it is locating securities with a lower dividend entitlement, to informing clients of upcoming dividend exposures, to diversifying the quantity of lenders behind borrow positions, to providing market colour on general stock flows. The team aim to ensure that Morgan Stanley's clients are fully informed about pertinent information.

Whilst sharing the same client base, Securities Lending is separated from Prime Brokerage by a Chinese wall, thereby keeping confidential the amount of short sales relative to borrow positions.