Last updated: 6/23/2026 
Securities lending is a recognized and established activity in financial markets that helps provide liquidity to markets and extra returns to investors who lend securities. The securities lending market involves lending of securities by institutional investors, such as insurance companies, to mostly banks and broker-dealers. It requires that the borrower post collateral in the form of cash or security. Insurance companies generally engage in securities lending to enhance returns on their investment portfolios, loaning out securities that are not actively traded.

Data on the securities lending market are estimated based on surveys, data-provider submissions, and regulatory collections.  According to S&P Global Market Intelligence Securities Finance, global securities finance revenues reached $14.906 billion in full-year 2025, up 27% year over year, with average balances/value on loan of $3.100 trillion, up 16% year over year, average lendable securities of $44.038 trillion, up 15% year over year, and average utilization of 5.5%.

By asset class, global equity securities finance revenues totaled $11.531 billion in full-year 2025, up 33% year over year, while government bond revenues totaled $2.282 billion, up 12% year over year, corporate bond revenues totaled $1.017 billion, up 4% year over year, and cash reinvestment revenues totaled $2.293 billion, up 13% year over year.

For U.S. insurers, securities lending activity remains relatively small as a share of total investments. At year-end 2025, U.S. insurers reported $41.9 billion in securities lending reinvested collateral, equal to 0.4% of the industry’s $9.6 trillion in total cash and invested assets. This increased from $34.1 billion, also 0.4% of total cash and invested assets, at year-end 2024.

At year-end 2025, life companies accounted for $31.7 billion of U.S. insurers’ securities lending reinvested collateral, or about 76% of the total; property/casualty (P/C) companies accounted for $6.8 billion, or about 16%; and health companies accounted for $3.4 billion, or about 8%. Title companies reported no securities lending reinvested collateral at year-end 2025.

Current financial-stability monitoring continues to focus on securities lending’s connections to short-term funding and cash collateral reinvestment. The Financial Stability Oversight Council (FSOC) 2025 Annual Report notes that private liquidity funds often serve as investment vehicles for large pools of cash collateral generated by securities lending activity and provide an additional source of income for large institutional lenders.

FSOC reported that private liquidity fund assets under management totaled approximately $358 billion as of year-end 2024; short-term investment funds sponsored by banks regulated by either the Office of the Comptroller of the Currency or the Federal Reserve had approximately $350 billion in assets under management as of year-end 2024; and ultrashort bond fund assets under management totaled approximately $390 billion as of year-end 2024. FSOC also noted data gaps and limitations related to certain short-term investment vehicles that challenge monitoring of risks to U.S. financial stability.

Efforts to improve transparency and oversight in this market have intensified. On October 13, 2023, the SEC adopted Rule 10c-1a under the Securities Exchange Act of 1934 to increase transparency and efficiency in the securities lending market. Rule 10c-1a became effective January 2, 2024. On January 2, 2025, the SEC approved FINRA’s Rule 6500 Series establishing the Securities Lending and Transparency Engine, or SLATE, to require securities loan reporting and provide for public dissemination of loan information. On December 3, 2025, the SEC granted temporary exemptive relief extending the Rule 10c-1a reporting date to September 28, 2028 and the dissemination date to March 29, 2029.

Securities lending is intended to be a low-risk investment strategy, providing the lender a modest income through fees charged to borrowers. Additional income may be generated by investing the cash collateral posted by the transactions' borrowers. The securities lending agreement spells out the term of the loan, the fee that the lender receives and the amount and type of collateral to be posted, among other items. The collateral is generally between 102% and 105% of the fair value of the securities loaned. Upon investing the posted collateral, insurance companies must consider credit and liquidity risks, as well as the asset/liability management risks of the potential investments. Insurance companies must also follow the appropriate statutory accounting rules related to securities lending transactions, which are included in the NAIC Accounting Practices and Procedures Manual. Insurance companies' individual investment policies should address the types and duration of investments that can be made with the cash collateral.

In general, securities lending transactions have a term of less than one year; however, terms can vary across different agreements. And, in most cases, the borrower may return the borrowed security and request its cash collateral back on relatively short notice, without penalty.

According to guidance in the Statement of Statutory Accounting Principles (SSAP) No. 103, "Collateral which may be sold or repledged by the transferor or its agent is reflected on balance sheet, along with the obligation to return the asset. Collateral received which may not be sold or repledged by the transferor or its agent [i.e. must be held and returned] is off-balance sheet." Note that for both on- and off-balance sheet reinvested collateral, summary information is required to allow for identifying potential liquidity constraints related to any potential duration mismatches.

Since 2010, securities lending transactions are subject to more defined valuation rules and disclosure requirements. Schedule DL was implemented in 2010 which includes a detailed listing of the invested collateral, including separate categories for bonds, preferred stock and common stock. These reporting changes provide more transparency whether insurers are overcollateralized or undercollateralized.

Regulatory transparency is expected to improve further as SEC Rule 10c-1a and FINRA SLATE reporting become operational. The current SEC temporary exemptive relief sets the Rule 10c-1a reporting date at September 28, 2028 and the dissemination date at March 29, 2029. Once implemented, these reporting requirements are expected to provide regulators and market participants with more standardized information on covered securities lending transactions.