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Global Securities Lending: H2 2026 Market Trends and Outlook Securities lending market reached record high

As we head into H2 2026, Asia Pacific emerges as the new top revenue-generating region in securities lending and securities lending in emerging markets evolves.

July 8, 2026 5 min read

Louisa Muyi Li

Business Development

In our last securities lending market commentary, we highlighted global monthly securities lending revenue surpassing $1 billion. As anticipated, 2025 finished with a record-breaking $14.9 billion in revenue generated from global securities lending activities.¹

This high-water mark was driven primarily by strong US equity activity: 42% of global equity securities lending revenue came from US equities. Many special securities and various corporate action events pushed monthly securities lending revenue from US equities to a record high of $713 million in July 2025.²

Asia Pacific emerges ahead of the Americas as the top revenue-generating region in securities lending

Asian equities gained momentum in 2025. Starting in December 2025, securities lending revenue generated from Asian equities surpassed that of US equities, marking a pivotal point and a new growth engine for the securities lending industry.

So far, 2026 has been a coming-out party for Asian equities. As of May 31, 2026, global revenue is up 36% year over year, with US equities up 8%, Asian equities up 75%, and EMEA equities up 55%.³While there has been growth across all regions, Asia Pacific has taken the top spot year to date.

Among Asian markets, South Korea delivered the strongest year-over-year growth rate of 235%, increasing from $124 million in the first five months of 2025 to $416 million during the same period in 2026.⁴In terms of revenue, Hong Kong and Taiwan were the leaders in the first five months of 2026, with $497 million and $494 million, respectively.⁵Taiwan, with AGM season starting in May, overtook Hong Kong as the monthly revenue leader.

The ranking may shift further at the half-year mark, with Taiwan’s AGM season continuing into June and Hong Kong’s IPO market remaining active.

While Asian equities have demonstrated strong momentum year to date, US equities suffered a 25% year-over-year decline in average fees, which weighed on revenue in May.⁶It’s worth noting that last year’s leader, the US equity market, truly took off during the summer months of June and July 2025. From May to June, revenue more than doubled, primarily because year-over-year fees increased 79%.⁷With upcoming headline IPOs, geopolitical uncertainty, and new Federal Reserve leadership, could the US equity market have another “hot” summer in securities lending?

The evolution of securities lending in emerging markets

It is surprising to see Asian equities overtake US equities as the securities lending revenue leader in the first five months of 2026. Fifty percent of Asian equity securities lending revenue came from developed markets—Japan, Hong Kong, Australia, Singapore, and New Zealand. The other 50% came from emerging markets—South Korea, Taiwan, Malaysia, and Thailand.⁸ This split highlights the growing contribution of emerging markets to regional revenue.

Developed markets have been active in securities lending since the beginning of the industry in the mid-1970s, while emerging markets only entered the scene in the 21st century. With each emerging market having its own nuances, product development for offshore investors has taken a long and careful path. Many markets, such as Thailand and Taiwan (for select issuers), have foreign ownership limits at the security level. Most emerging markets have mandatory buy-ins for shares that fail to be returned on the settlement date. Offshore investors engaging in securities lending in Taiwan are also subject to local taxation, as that revenue is regarded as Taiwan-source income.

Despite these challenging nuances, ever-stronger demand from the borrower community has supported the quiet debut of securities lending in South Korea, followed by Taiwan and, most recently, Malaysia. Compared with developed markets such as the US and the UK, where the average securities lending fee is approximately 40 bps (2025 full-year average), emerging market average fees can be as high as 200 bps. With these returns, more and more lenders have entered emerging markets.

Following the outbreak of COVID-19, many European markets imposed short-selling bans, and this trend expanded to APAC. South Korea, Malaysia, and Thailand imposed short-selling bans, while Taiwan imposed certain restrictions on short-selling. Most of these markets lifted the bans gradually, with South Korea being the last, lifting its ban only in March 2025. This ushered in a boom in emerging market securities lending in APAC. Monthly securities lending revenue generated from Taiwan grew from $65 million in January 2025 to $147 million in May 2026, while revenue generated from South Korea grew from $7 million in January 2025 to $104 million in May 2026.⁹These two markets led the region to overtake the Americas (90% of the regional revenue came from the US) as the highest revenue-generating region.

State Street Investment Management’s securities lending program

A well-managed securities lending program can be a valuable portfolio management tool that increases a fund’s incremental risk-adjusted return.

Our securities lending program focuses on extracting the full intrinsic value of securities lending in a risk-controlled manner and aligning our investment philosophy with our clients’ long-term value principles. We engage leading lending agents and cash reinvestment specialists to provide:

A tailored balance between risk and return
Robust risk management controls and comprehensive program oversight
Transparent fee structure and reporting

With strong growth across all regions, securities lending is poised to remain a valuable source of incremental return for investors navigating today’s complex environment.

Find out more

For additional information about securities lending, please contact a member of State Street Investment Management’s Client Coverage Group:

Timothy D. Mullaney, Head of Asset Manager and Hedge Funds
Ashley Wilson, Head of US Asset Owner
Benjamin Woloshin, Head of Insurance

Footnotes

Disclosure

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