Hong Kong Authority Gives Northern Trust License to Set Up a Securities Lending Unit

Article excerpt

Northern Trust Co., a securities custodian and trustee with some $520 billion in assets under administration, has obtained a license from the Hong Kong Securities and Futures Commission to set up a subsidiary for securities lending.

"This gives us 24-hour securities lending coverage," said Robert Lapinski, vice president of corporate and institutional services marketing at the unit of Chicago-based Northern Trust Corp.

Securities lending involves using customer assets to earn extra income from lending securities to broker-dealers and other financial institutions for market making, hedging or arbitrage.

A major provider of master trust, global custody, and investment management services to institutional clients, Northern Trust began securities lending in 1981. The bank has since steadily expanded its network of subcustodians to 60 countries around the world. It provides securities lending to 31 markets from its Chicago offices and a branch in London.

Asia's fast-growing markets are proving increasingly irresistible to U.S. banks, many of which hope to use Hong Kong as a gateway to China. …