EquiLend Services Restored Following Unauthorized Access Incident
EquiLend, a key player in securities lending on Wall Street, announced on Friday the successful restoration of several services, including trading and post-trading solutions. This recovery comes more than a week after the company experienced a disruptive outage attributed to unauthorized access to its systems.
In late January, EquiLend disclosed the detection of unauthorized entry into its systems, prompting the temporary shutdown of a portion of its infrastructure. The affected platform, Next Generation Trading, oversees transactions exceeding $2.4 trillion monthly, serving a diverse client base of nearly 200 asset owners, agency lending banks, broker-dealers, and hedge funds.
The ownership involvement of major Wall Street entities such as Goldman Sachs, BlackRock, J.P. Morgan, and Bank of America Merrill Lynch adds significance to the recent incident.
Amid the EquiLend disruption, market participants had to resort to manual processing, with a limited overall impact, as confirmed by a spokesperson at the Financial Services Information Sharing and Analysis Center (FS-ISAC) last week.
Risks and Regulatory Reporting Challenges
Josh Galper, managing principal at the capital markets consultancy Finadium, highlighted the risks clients faced during the outage. This included the potential of missing crucial regulatory reporting obligations. The unavailability of data from EquiLend could impede risk and liquidity managers, impacting their risk and capital ratios. This, in turn, could hinder both internal management and regulatory reporting.
With EquiLend successfully restoring its services, Galper expressed optimism that data reconciliation would occur over time. Reports would eventually be filed, albeit possibly with some delays. The company’s ability to recover swiftly is crucial in mitigating the broader industry impact and ensuring the continued integrity of securities lending operations.
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