BNY and the National Bank of Canada went live this week with EquiLend’s 1Source platform, joining the blockchain-based system designed to eliminate manual trade reconciliations in the securities finance industry.
The company that offers stock lending said a global broker-dealer will begin trading on the platform soon, with several other firms close to signing on. BNY and the National Bank of Canada are now executing securities lending transactions through the distributed ledger, which maintains a synchronized record of trades between counterparties.
The industry currently spends roughly $100 million annually on reconciliation teams and fixing settlement breaks, according to estimates from industry participants. EquiLend’s system is built to remove those costs by keeping both sides of each transaction aligned from the start, rather than having firms record details separately and fix mismatches later.
Nehal Udeshi, Head of Securities Finance at BNY
“This milestone underscores BNY’s commitment to innovation and leveraging new technologies to mitigate risk,” said Nehal Udeshi, Head of Securities Finance at BNY. “By using 1Source, we’re aiming to manage challenges associated with manual reconciliation, while delivering benefits to our clients.”
For example, EuiLend’s services have been used by eToro for the past six months, allowing UK and European users to earn additional income by lending their stocks. A similar product was launched by Robinhood in 2022 and by Interactive Brokers in 2023.
More Firms Preparing to Join Network
Carl Attie, Managing Director and Head of Global Securities Finance at National Bank of Canada, said the bank joined the platform as part of its focus on technology solutions for clients.
“This milestone lays the foundation for broader adoption and future enhancements, enabling us to streamline processes, increase efficiency and enhance resilience in the securities finance marketplace,” Attie said.
EquiLend developed the platform with Digital Asset’s Canton blockchain technology, which allows multiple parties to share transaction data while maintaining privacy controls. The system launched with coverage of North American equities backed by cash collateral, though expansion to corporate bonds, non-cash collateral, and European markets is planned.
Third-party analysis from Vy Solutions in 2022 estimated the platform could save the securities finance industry hundreds of millions of dollars per year through reduced operational expenses and fewer settlement failures.
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Platform Targets Fragmented Back Office Systems
The securities lending market has relied on fragmented back office systems where counterparties maintain separate records of the same transactions. Discrepancies in quantities, rates, or settlement dates often surface days after trades are executed, creating reconciliation headaches and liquidity risks.
Rich Grossi, CEO of EquiLend
EquiLend’s system puts each transaction on a shared ledger where both parties see identical information in real time. Lifecycle events like recalls, rate changes, and returns are processed within the same environment, automatically updating both sides simultaneously.
“Each new participant strengthens the network effect of 1Source, accelerating the industry-wide benefits of improved accuracy, transparency, and efficiency,” said Rich Grossi, CEO of EquiLend.
The platform currently supports loan initiation, daily mark-to-market calculations, benchmark-based rate adjustments, recalls, and buy-ins. EquiLend plans to add automated rerating for large loan books tied to benchmark shifts, which should cut another source of breaks when reference rates change.