A Melbourne based securities lending company has developed an online system that will allow stocks to be borrowed.
Opes Prime chief information officer Anthony Blumberg said investors could borrow the stock online in real-time using the new system developed by his company.
“I saw that automating the business would allow us to consolidate smaller loans, so instead of borrowing a handful of shares, Opes can borrow larger amounts,” he said.
“We will therefore be able to offer smaller loans on a wider range of stocks.”
Called Opes Prime First, the system is a multi-market, multi-currency system, which is a vital part of the company’s offshore expansion plans.
“This system can be set up in any market relatively easily,” Blumberg said.
“We will soon be taking it to Singapore to support our newly launched business there, and hope to launch in new markets throughout Asia and Europe.”
Opes Prime First utilises grid computing technology, which has the key feature of a retail stock loan system.
This allows Opes Prime to consolidate small loans, which is important for the company’s future retail plans, Blumberg said.
“Sophisticated retail investors can find it difficult to get small loans on stocks, especially on mid-cap and small-cap stocks.
“Brokers are not keen to deal with them because it’s too expensive and risky for them.”
Blumberg said clients could use virtually any stock on the ASX; however, some illiquid small caps would be reviewed on an individual basis.
“If it was part of a $1 million portfolio, we might loan against illiquid stocks,” he said.
The online service will replace manual stock lending and processing systems, which reduces the chance of keying errors.
“Stock lending is traditionally a manual process involving phone calls, emails and pieces of paper,” Blumberg said.
“These manual processes would have been a barrier to us entering the retail market, whereas Opes Prime First enables us to handle larger volumes of orders.”
The systems were developed on Oracle’s BPEL Process Manager technology, part of the Oracle SOA suite.
He said the Oracle partnership simplified the development process.
“It was a big decision to build our own system.
“The result is a system built using technology that will soon become industry standard. Oracle was a perfect fit due to their business process modelling and integration technology.”
