UAE – Mubasher: Dubai-based market-making and brokerage platform xCube has launched fully automated securities lending and borrowing (SLB) for retail investors, according to a press release.
The launch, which is the first of its kind in the Gulf country, will boost trading activity on the Dubai Financial Market (DFM). It will enable users to implement the SLB process directly through the xCube application, without the need to engage a broker.
By fully automating the process, xCube secures more efficient transactions and control for clients. Hence, the platform is backing the long-term health of capital markets by empowering investors.
Hamed Ali, CEO of DFM, said: “Securities lending and borrowing is already a crucial part of DFM and the automated service from xCube for retail investors will improve the efficiency and effectiveness of the service - making it faster, more affordable and more accurate to execute transactions, for both lenders and borrowers.”
“We see Automated SLB as another significant stride in accelerating the development of UAE capital markets and cementing Dubai’s position as a global financial hub,” Ali elaborated.
Saad Chalabi, CEO of xCube, indicated: “Investors often seek to maximise returns from their securities portfolios. By offering automated SLB services, xCube enables retail investors to lend their securities to others in exchange for a fee all while maintaining instant access to their stocks should they want to sell them.”
“On the other side, borrowers, including hedgers and other market participants, gain access to specific securities to hedge their portfolios, and implement strategic trading approaches all at the touch of a button,” Chalabi highlighted.
Automated SLB services grant lenders several benefits, including additional streams of revenue, a streamlined lending process, and the freedom to sell securities at any time.
Chalabi added: “In the longer term, automated securities lending and borrowing will help establish an anonymous, diversified pool of lenders, which is crucial for engaging borrowers and facilitating short selling.”
“By providing essential hedging mechanisms, xCube is also enhancing the local derivatives markets, helping to bring the DFM in line with peers from developed markets,” he underlined.
The CEO concluded: “Automated SLB will not only support a more equitable financial landscape but will also aid the evolution of derivatives and structured products in the UAE.
