J.P. Morgan Worldwide Securities Services, the custody business of
J.P. Morgan Chase, the US financial services giant, has executed and settled a securities lending transaction in the Brazilian market, the first time a non-domestic agent lender has completed a loan transaction in Brazil.
“As Brazil is a complex market, we have been involved in due diligence for quite some time and we are very pleased to now be able to enter such an exciting market,” said Judy Polzer, global head of securities lending product at J.P. Morgan.
J.P. Morgan also claims to have been the first agent lender to settle a non-domestic securities lending transaction in Korea. The firm is active in more than 60 countries, with US$16.6 trillion in assets under custody.
The Latin American market has seen the number of hedge funds, who depend upon stock lending for taking short positions, grow by a factor of four over the last ten years. Overseas sell-side firms have been expanding their operations in Brazil to fulfil the needs of buy-side firms, for example Citi recently launched an electronic equities platform in the country.
Meanwhile national exchange BM&F Bovespa has introduced a range of new products to attract investors, including American depository receipts and four new indices earlier this month, making it possible to create exchange traded funds in the country for the first time.