Financial services technology
SL-x was a start-up company that had developed an electronic trading platform for securities lending by investment banks and custodian banks, built on innovative social networking features that catered to the relationship-based market model.
The global stock lending market had an average of €700 billion securities on loan in 2011. It is intermediated by large financial institutions that trade in a bilateral over-the-counter (“OTC”) fashion, primarily through the phone, email and instant messaging systems. Palamon believes that regulatory reaction to the financial crisis aims to transition OTC markets to a centrally cleared model. OTC trading is highly inefficient from a capital usage standpoint at a time when banks are being required to allocate more capital to their trading activities. SL-x’s centrally-cleared electronic trading platform for stock lending offers significant capital and cost savings to banks.
In 2014 SL-x gained FCA approval to commence operating as a multilateral trading facility enabling the company to start commercial operations across 17 European capital markets.