Securities Lending Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Global Securities Lending Market Trends and Insights

Growing Short-Selling and Relative-Value Trading Activity Increasing Securities Borrow Demand

Short-selling and relative-value positions are increasing the need for borrowed securities across the securities lending market. Global equity lending revenue rose 38% year over year to USD 5.4 billion in the first half of 2026. Asia-Pacific generated USD 2.1 billion as semiconductor, artificial intelligence infrastructure, and electric vehicle positions remained on loan for longer periods^{[1] EquiLend, “EquiLend: Global Securities Lending Revenue Hits Record USD 9.1 Billion in H1 2026 as Equity Demand Surges,” EquiLend, equilend.com}. Curated counterparty lists and flexible term-lending arrangements can improve fee capture when demand centers on a smaller group of special securities. Convertible issuance linked to artificial intelligence infrastructure financing also expanded convertible-arbitrage borrowing demand in 2026. EquiLend processed 121,800 United States equity trades on the June 2026 Russell reconstitution date, showing the operational importance of managing large event-driven demand peaks

Expansion of Institutional and ETF Asset Pools Increasing the Supply of Lendable Securities

Institutional portfolios and exchange-traded funds are widening the inventory available to the securities lending market. Larger exchange-traded fund portfolios give lenders more individual positions that can be offered to borrowers, instead of relying only on broad custodial pools. Active, leveraged, and crypto-related exchange-traded fund holdings can have distinct borrowing patterns from passive index positions. Exchange-traded fund lending revenue reached USD 405 million in the first half of 2026, an increase of 62% from the prior year. This broader inventory can support lending programs with more specific securities and loan terms. It also helps programs respond when demand shifts between index positions, concentrated equity trades, and other collateral needs.

Rising Institutional Adoption of Securities Lending for Incremental Portfolio Income

Large asset owners increasingly treat lending income as part of portfolio management within the securities lending market. BNY reported USD 6.1 trillion in lendable assets and USD 695 billion on loan across 34 local markets at the end of 2025^{[2]BNY, “APAC Securities Finance Rewired: Outcomes & Innovation,” BNY, bny.com}. Its mandate structures accommodate environmental, social, and governance restrictions, proxy-voting thresholds, and counterparty concentration limits. The Global Principles for Sustainable Securities Lending framework addresses the treatment of green bonds and stewardship concerns in lending arrangements. Those requirements add governance work for lenders and agents, particularly when investors must balance voting objectives with income opportunities. Scale, therefore, matters because larger providers can support customized restrictions across multiple markets and asset classes.

Increasing Securities Borrow Demand for Market Making and Settlement Coverage

Market making and settlement coverage are raising the structural need for borrowed securities in the securities lending market. The United States Treasury clearing mandate takes effect on December 31, 2026, and requires central clearing for covered Treasury transactions^{[3] International Securities Lending Association, “2026 Securities Lending Regulatory Horizon Scanner,” ISLA, islaemea.org}. Clearing participants need efficient funding and inventory arrangements as transactions move into centrally cleared workflows. Government bond lending revenue rose 27% during the first half of 2026. United States Treasuries, French OATs, and United Kingdom gilts each recorded higher lending revenue as sovereign volatility and primary issuance increased hedging activity. Agency and centralized programs can mobilize assets more effectively, while higher utilization of scarce securities supports the economics of specialized lending programs.

Capital and Balance-Sheet Constraints Limiting Intermediary Lending Capacity

Capital requirements are limiting how much balance sheet some intermediaries can devote to the securities lending market. The United Kingdom Prudential Regulation Authority published final Basel 3.1 rules in January 2026, with implementation scheduled for January 2027. Regulation (EU) 2025/1215 changed net stable funding ratio requirements for certain securities financing transactions with residual maturities below 6 months^{[4]European Parliament and Council, “Regulation (EU) 2025/1215 Amending Regulation (EU) No 575/2013 as Regards Requirements for Securities Financing Transactions Under the Net Stable Funding Ratio,” EUR-Lex, eur-lex.europa.eu}. These rules can make short-term general collateral intermediation less attractive for bank balance sheets. Centrally cleared structures can help participants use multilateral netting and reduce risk-weighted assets. The resulting economics favor agents that can provide cleared triparty arrangements and broader collateral-management support.

Cross-Border Tax, Legal, and Settlement Complexity Restricting International Lending

Cross-border participation remains constrained by tax, legal, and settlement requirements in the securities lending market. The United States Internal Revenue Service issued Notice 2025-63 in October 2025 on proposed rules for sourcing borrow fees by recipient residence. The notice addressed withholding treatment that affects many non-United States lenders. ISLA updated its United Kingdom Tax Addendum for the Global Master Securities Lending Agreement in February 2026 to clarify manufactured-payment withholding obligations. Foreign ownership limits in Thailand and source-income taxation in Taiwan can restrict access to fee-rich lending activity. Counterparty and collateral risks also make beneficial owners cautious, while multi-jurisdictional collateral management and post-trade processing raise operating costs.

*Our forecasts treat driver/restraint impacts as directional, not additive. The impact forecasts reflect baseline growth, mix effects, and variable interactions.

Segment Analysis

By Asset Class: Equities Lead on Specials, Fixed Income Deepens

Equities accounted for 45.3% of the securities lending market size in 2025 and are forecast to grow at an 8% CAGR through 2031. Equity lending is supported by exchange-traded fund activity, semiconductor-linked positions, and volatility surrounding artificial intelligence-related securities. Common shares, ADRs, and equity exchange-traded products generated USD 11.5 billion of USD 14.9 billion in global lending revenue during 2025. Asian technology and semiconductor names were among the higher-earning special securities. Exchange-traded fund lending revenue then rose to USD 405 million in the first half of 2026.

Government and sovereign bonds formed the next major fixed-income source of lending activity. Revenue from government bond lending increased 27% in the first half of 2026 as high-quality liquid asset demand and clearing deadlines increased borrowing needs. Corporate bond lending balances in North American investment-grade securities also expanded as managers used holdings to manage credit-spread risk and monetize inventory during issuance periods. Agency bonds, supranationals, and convertibles expanded the range of fixed-income and hybrid collateral available to programs. Convertible issuance connected to artificial intelligence infrastructure financing created related convertible-arbitrage equity borrowing demand. This cross-asset mix broadens the securities lending market size opportunity by enabling lenders to capture both collateral-driven demand and higher-margin special-security opportunities.

By Participant Type: Sovereigns Anchor Supply, Asset Managers Drive Growth

Government and sovereign entities held 28.1% of the securities lending market share in 2025. Their portfolios usually provide stable inventory and support longer lending tenors. Their governance mandates tend to prioritize controlled program operation over the highest possible fee rate. Collective investment vehicles and asset managers are forecast to expand at a 9.2% CAGR through 2031. Actively managed exchange-traded funds, interval funds, and UCITS vehicles are activating programs to offset management-fee pressure.

Banks and broker-dealers primarily participate as borrowers that finance short positions, manage inventory, and address settlement obligations. Their demand is increasingly affected by capital costs and the growing use of cleared structures. BNY launched a centrally cleared triparty model for UCITS clients with Cboe Clear Europe in November 2025. The structure allows UCITS lenders to participate without posting margin while supporting risk-weighted asset efficiency for borrowers. Insurance companies, endowments, foundations, and corporate treasuries provide a meaningful but comparatively underutilized source of supply, creating additional opportunities to expand the securities lending market size as participation broadens.

By Lending Model: Agent Dominates, Principal Gains Ground on Revenue Certainty

Agent lending commanded 78.9% of the securities lending market share in 2025. Beneficial owners use this model because custodian banks can administer global programs, manage collateral, and provide indemnification arrangements. BNY reported USD 6.1 trillion in lendable assets across 34 local markets at the end of 2025. Its program includes directed loans, indemnified and non-indemnified structures, asset segregation, and collateral-investment options. Cleared, peer-to-peer, and pledge-based structures give beneficial owners additional choices for program design.

Principal lending is forecast to grow at an 8.5% CAGR between 2026 and 2031. Broker-dealers value guaranteed-term supply, and institutional lenders may prefer contracted revenue during volatile periods. BNP Paribas offers principal lending arrangements with revenue fixed for a defined period, regardless of market events. This approach suits owners who place greater value on income visibility than on maximizing changing fee rates. Centrally cleared principal structures may further support the securities lending market size by enabling participants to use multilateral netting under stricter capital requirements.

Geography Analysis

North America held 38.2% of the securities lending market share in 2025. Deep equity custodial pools and a high concentration of hedge-fund borrowers support the region's position. North American equity lending revenue reached USD 2.3 billion in the first half of 2026. Artificial intelligence trading, biotechnology event positions, credit exchange-traded fund demand, and energy short positions drove activity. The December 2026 Treasury clearing deadline is changing how participants manage inventory and funding.

Europe has growing fixed-income borrowing needs as liquidity conditions change and participants manage high-quality liquid assets. EMEA equity lending revenue reached USD 959 million in the first half of 2026, led by industrial, financial, and merger-related positions. Germany generated USD 132 million as industrial and auto-sector positions increased. SFTR compliance and CSDR provisions add cost and operational requirements for European programs. SAB Invest appointed J.P. Morgan as agent for its Saudi equity securities lending program in June 2026.

Asia-Pacific is forecast to grow at a 10.2% CAGR, the fastest regional rate in the securities lending market size. Asia-Pacific equity lending revenue rose to USD 2.1 billion in the first half of 2026. South Korea's reopening to short selling increased on-loan balances after the prior ban was removed. Taiwan has become important for artificial intelligence hardware supply-chain positions. Japan's policy normalization supports yield-enhancement demand in Japanese government bonds.