Canada Grows Securities Lending

Terry Flanagan

Citi implements securities lending program for AGF’s mutual funds.

Canada is getting serious about securities lending in a big way.

Citi has recently implemented securities lending services for AGF’s retail mutual funds in Canada.  This represents an expansion of the company’s existing long-term relationship with AGF, which includes fund administration, fund accounting, transfer agency and custody services.

“The addition and implementation of a securities lending component is a notable business milestone as Citi grows its Securities and Fund Services business in Canada.

“Canada is seen throughout our global organization as a growth market for Citi’s Global Transaction Services, which includes the Securities and Fund Services business,” Gurmeet Ahluwalia, head of Citi’s Securities and Fund Services business in Canada, told Markets Media.

“Over the past two years, we have added to our product offering by building a robust agency and trust business in Canada, and entering the pension administration space, he said.

Recently, Citi become a full-service provider to Empire Life, one of the largest recent mandates awarded in the Canadian market. Citi will provide transfer agency, fund administration, custody and securities lending services for Empire Life’s investment products.

The mandate, which will represent the administration of approximately $9 billion in assets, is scheduled to begin this year.

A variety of factors is driving demand for Citi’s securities lending business in Canada.

“As organizations continue to seek greater alpha, Citi’s securities lending product enables business and revenue growth by providing an additional revenue stream,” said Ahluwalia. “With this product, the client is able to generate returns from their assets that can be passed on to their unit holders. Additionally, Citi’s market-tested best practices are able to provide greater transparency and visibility of information, something we find to be in high demand in the market.”

AGF Management Ltd., provides a diversified family of mutual funds, mutual fund wrap programs and pooled funds. AGF also manages assets on behalf of institutional investors including pension plans, foundations and endowments as well as for private clients.

“Citi’s securities lending product enables clients to generate returns in addition to those from asset appreciation alone,” said Ahluwalia. “AGF did not participate in a securities lending program previously, and we are pleased to be able to provide them with this service.”

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