Congratulations to the team for hitting the six-year anniversary of the Fidelity Agency Lending programme. Can you share with us some of the top trends you are observing and what is top of mind for clients?
Justin Aldridge: It is a milestone we are proud of 鈥� our team is dedicated to delivering strong results to our clients, and we are grateful for those clients who put their trust in us. Over the past six years, Fidelity Agency Lending has evolved into a differentiated offering, and we are seeing several key trends shaping the securities finance landscape.
First, performance and revenue generation remain top priorities. Clients are increasingly focused on total programme returns rather than fee splits, they ask sharper questions about gross revenue generation, asset utilisation, and borrower demand. This is especially relevant in a market where specials activity and spreads are more concentrated.
Second, flexibility and scalability are essential. Asset managers want programmes that can evolve with their portfolios, whether that means entering new markets or adopting capital efficient trade structures that better align with fund objectives. Third, operational excellence is critical. With T+1 implementation and heightened scrutiny on risk management, clients are prioritising providers who offer real-time connectivity, automated reconciliations, and seamless integration with custodians. For these client needs, Fidelity鈥檚 investment in technology and infrastructure has been a key differentiator.
Lastly, we see consolidation among agent lenders. As firms de-emphasise their securities lending programmes, or exit the space, clients are reassessing relationships and seeking providers with long-term stability, scale, and strategic clarity. Fidelity stands out in this environment as the largest third-party agent lender in the market with over US$4.3 trillion (as of 30 June) in enrolled assets and multiple sizable client commitments. This shift is creating opportunities for platforms like Fidelity鈥檚, which combines performance, operational strength, and deep asset manager alignment. Ultimately, clients are looking for more than a lending provider 鈥� they want a strategic partner who can deliver consistent value and help them evolve as the market and their needs change.
Given that some agent lending providers are leaving the space, what kind of investments are you making to your programme to add value and positively impact clients?
Aldridge: It is a timely question. At Fidelity, agency lending is a long-term strategic priority, fully integrated into our broader asset management and distribution ecosystems. That tight integration allows us to invest with conviction and consistency.
At the programme level, we have made sustained investments in technology, talent, and infrastructure. We have built real-time connectivity with custodians, enhanced automation across reconciliation and settlement, and ensured full readiness for regulatory shifts like T+1.
We continue to invest in what we believe to be our market-leading automated trading system, which over 90 per cent of our loan activity flows through.
Our team continues to grow, with deep expertise across tax, regulation, market structure, and client service, allowing us to support increasingly complex programmes with precision and scale. Importantly, Fidelity Agency Lending is the number one lender of US equity specials 鈥� a leading position that reflects our importance to the market and the borrower community which drives increased demand for our platform.
At the industry level, we are actively engaged in advocacy to improve transparency, efficiency, and client outcomes. We are also focused on shaping a healthier ecosystem for securities lending through our work with trade associations, regulatory discussions or market structure enhancements. We believe a strong, well-functioning industry benefits everyone, especially the investors and stakeholders our clients serve.
A great example is our work leading the industry efforts to use open protocols to streamline connectivity among industry participants and improve resiliency and outcomes for all participants in the ecosystem.
In a time of consolidation and change, Fidelity鈥檚 commitment to the securities lending industry and our clients is unwavering.
If we pivot to US equities trading, what drove revenue in the first half of 2025, and how did market volatility help?
Aldridge: The first half of 2025 was a standout period for US equities and APAC markets, and that momentum translated into strong revenue generation across our lending programme. Several factors contributed such as the resurgence in IPO activity and a wave of merger and acquisition announcements that injected fresh liquidity and created new specials opportunities, particularly in tech, healthcare, and financials. Elevated market volatility also played a key role, driving increased demand from borrowers looking to hedge or take directional positions, which boosted lending spreads and utilisation.
Fidelity鈥檚 ability to capture that demand efficiently through deep borrower relationships, strong distribution, and a well-optimised inventory was a major driver of outperformance. Our programme design emphasises flexibility and capital efficiency, allowing us to respond quickly to market shifts and client needs. The combination of favourable market conditions and a high-performing platform helped us unlock meaningful revenue for our clients.
Where do you see revenue opportunities for the rest of the year, and what economic factors are you watching?
Aldridge: We see continued opportunity in US and global equities. The rebound in IPOs, ongoing M&A momentum, and sustained volatility are creating fertile ground for specials generation and elevated borrower demand. These dynamics are especially favourable for asset managers with differentiated inventory and actively engaged lending programmes.
We are also watching for opportunities tied to new market entries, and evolving trade structures that offer greater capital efficiency. These structures will help clients optimise their returns, but will likely require customised solutions, of which Fidelity Agency Lending is well suited to help implement.
From a macro perspective, we are closely monitoring interest rate policy, inflation, and geopolitical developments, all of which influence liquidity, collateral flows, and borrower behaviour.
Regulatory shifts like T+1 and potential changes in capital treatment will also shape how programmes are structured and where value can be unlocked.
Fidelity is well positioned to help clients capture these opportunities through strong performance, operational agility, and strategic alignment. Our focus remains on seeking to deliver strong, market-leading value and adapt quickly to market conditions.
Yuri, you head up technology efforts. What challenges does the industry face today that can be solved with tech and improved processes that come with automation?
Yuri Brightly: I am excited by the opportunity for the securities finance marketplace to take its next major step forward in electronic connectivity.
Across the ecosystem that includes lenders, borrowers, and vendors, there is a clear need to improve integration, enhance resiliency, and unlock the next wave of innovation.
As Justin touched on earlier when discussing our advocacy work at the industry level, one of the most promising paths is the adoption of open protocols, which have already transformed the equities and fixed income markets.
By embracing open standards, the industry can reduce integration costs, improve liquidity efficiency, and foster greater innovation. This is especially timely as market participants seek resilient, cost-effective solutions in a rapidly evolving environment.
A common set of standard fields, such as security, quantity, and rate or fee, can streamline communication while still allowing counterparties the flexibility to go beyond the baseline.
This balance between standardisation and customisation will enable the development of richer messaging and more advanced services.
We see this as a significant opportunity to strengthen the infrastructure of securities lending and deliver better outcomes for all participants.
It is also a rewarding area of industry advocacy and collaboration, and we are excited to help drive these beneficial changes forward.
糖心vlog finance professionals and portfolio managers rely heavily on real-time data to inform decision making. What are you hearing from clients about this need? Can you share ways in which Fidelity has improved the speed of data?
Brightly: Real-time information is critical across all aspects of securities lending. It drives operational efficiency, supports best execution, and helps minimise risk. Traders without access to timely data may miss lending opportunities or fail to achieve optimal pricing. Similarly, if real-time updates, such as inventory changes, buy settlements, or loan returns are not incorporated into availability, it can lead to reduced utilisation and missed revenue.
This need for speed and precision is especially important in scaled programmes and helps to avoid market penalties like the Central 糖心vlog Depositories Regulation (CSDR), the Treasury Market Practices Group (TMPG), or sell fails. This is true in the US market, the APAC region, which has no fail markets and pre-sale notification requirements, and for Europe when it implements T+1 (where timing and accuracy are essential). Firms still relying on batch processing risk falling behind, missing deadlines, and taking on unnecessary exposure.
Asset managers have a fiduciary responsibility to oversee their lending programmes and the providers they choose. Fidelity supports this oversight by investing in tools that enhance transparency and control. We tailor our programmes to meet each client鈥檚 needs and provide high-touch relationship management. In addition, we offer technology solutions like PB Optimize; a fully integrated financial technology platform that, while independent of Fidelity Agency Lending, is available to our lending clients. It delivers enriched portfolio finance data, reporting, and transparency to help asset managers make better-informed decisions.
One of the platform鈥檚 key advantages is the ability to provide a holistic view across multiple agent lending relationships, which is increasingly important for large, diversified managers. At Fidelity Agency Lending, our goal is to invest in people, technology, and tools that empower clients to meet their fiduciary obligations and manage their programmes as seamlessly and effectively as possible.
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Image: Justin Aldridge and Yuri Brightly 