Insight
MARCH 2026
Mike Norwood
APAC Securities Lending Trading Activity: Growth, Friction, and the Automation Imperative
APAC securities lending trading activity has undergone a structural shift over the past three years. The data, sourced from EquiLend’s NGT trading platform, shows not only cyclical recovery but a deeper transformation in participation, sector concentration, regulatory influence and rate dynamics.
In 2025, more than 4 million trades of APAC securities were conducted on NGT, up 28% year over year, while trade notional grew 60% year over year. All top ten trade count days on record occurred in 2025. That is not just rebound activity, it signals sustained demand for short exposure, hedging and event-driven positioning across the region.
At a structural level, three shifts stand out.
First, a pronounced migration toward specials. Across Japan, Hong Kong, South Korea and Taiwan, 301+ bps trades expanded sharply. This indicates tighter borrow conditions in specific names, greater dispersion and more catalyst-driven trading rather than broad index hedging.
Second, regulatory catalysts have become primary drivers of participation. South Korea’s short-selling ban lift in March 2025 triggered a 476% surge in trade count. Japan’s rate normalization and carry trade unwind reshaped hedging behavior. Regulation has gone from a background factor to a volume driver.
Third, sector concentration has intensified. Industrials, Information Technology and Consumer Discretionary dominate trade flow, while Health Care posted the fastest growth at 49% year over year. Much of this ties back to semiconductor exposure, China consumption sensitivity and rate-driven financial volatility.
Markets Driving the Momentum
Several APAC markets have clearly outperformed.
Hong Kong
Hong Kong delivered 73% year over year growth, reaching 687,972 trades on NGT in 2025. The driver was event flow. Corporate actions, M&A and new listings generated stock-specific borrowing demand. Specials activity in Hong Kong rose 153% year over year, underscoring concentrated pressure in individual names.
Hong Kong’s continued role as the primary access point to mainland exposure via Stock Connect adds structural demand. It functions as a volatility transmission hub for China-related risk.
South Korea
South Korea’s rebound was regulatory in nature. Trade count rose from 30,716 to 177,036, a 476% increase. The lift of the short-selling ban released pent-up demand and triggered a surge in specials, increasing from 2,554 to 70,336 trades in 2025. This is especially notable given the short-selling ban was only lifted at the end of Q1 2025, so the substantial increase comes from about three quarters of trading activity.
The lesson is that access constraints suppress volume. Remove them and activity returns quickly, particularly in markets with strong domestic retail participation and global index inclusion.
Japan
Japan remains the anchor market with more than 2.4 million trades in 2025, up 14% year over year. The August 2024 carry trade unwind fundamentally altered hedging behavior. Elevated volatility normalized the use of securities lending as a risk management tool rather than a tactical overlay.
Japan’s resilience suggests structural depth. Volatility shocks increased utilization and embedded borrowing demand into institutional workflows.
Where Activity Has Stalled
Not all markets accelerated in 2025.
Thailand declined marginally year over year. This reflects a common pattern in smaller emerging markets. When liquidity depth is limited and institutional participation narrower, catalyst-driven bursts are not always sustained.
Stalls typically stem from one of four factors:
- Limited float availability or constrained lendable supply
- Regulatory uncertainty or short selling restrictions
- Narrow sector representation
- Operational inefficiencies that increase friction costs
When any of these persist, growth plateaus despite macro potential.
The Taiwan Case Study
Taiwan grew 20% year over year to more than 220,000 trades, supported by its semiconductor dominance. Information Technology sector trades rose 28% year over year, closely aligned with Taiwan’s ecosystem strength.
The AI and advanced computing boom amplified demand for exposure to semiconductor leaders and their supply chains. At the same time, more than 100,000 trades occurred in the 301+ bps band, showing persistent hard to borrow dynamics.
So why the plateau narrative?
Taiwan’s constraints are less about access and more about concentration. Liquidity is deep but heavily skewed toward a handful of large-cap technology names. When positioning becomes crowded, borrow tightens and specials expand. Beyond that core ecosystem, breadth is narrower than Japan or Hong Kong.
Operational friction also plays a role. Cross-border settlement nuances, collateral optimization challenges and inventory visibility gaps limit seamless scaling of activity.
In short, Taiwan’s growth is structurally strong but sector concentrated. Diversification, not access, is the next growth unlock.
Automation as the Revenue Multiplier
Across APAC, margin compression and competition are tightening. In that environment, automation is not about efficiency optics but is directly tied to revenue capture.
Greater trading automation directly supports revenue growth by increasing speed, precision and scalability. In specials-heavy markets, faster locate and borrow response improves fill probability and allows participants to capture high-rate opportunities before they decay. Furthermore, during volatility spikes, when record trade days strain manual processes, automated trading and post-trade workflows enable firms to monetize activity rather than be limited by operational capacity.
The broader pattern across APAC is that growth is strongest where access is open, sector catalysts are active and infrastructure supports speed and transparency. Where friction remains, growth slows.
The next phase of expansion will not come from macro tailwinds alone. It will come from structural modernization. In a region defined by dispersion, regulatory evolution and sector concentration, automation is becoming the primary lever converting activity into durable revenue.
You may also like:
APAC Securities Lending Trading Activity: Growth, Friction, and the Automation Imperative
APAC securities lending trading activity has undergone a structural shift over the...
Read More
Monthly Securities Finance Market Review: January 2026
EquiLend’s Head of Trading Solutions, Mike Norwood, shares his January securities finance...
Read More
Monthly Securities Finance Market Review: December 2025
EquiLend’s Head of Trading Solutions, Mike Norwood, shares his monthly market review for securities...
Read MoreThis content is provided for informational purposes only and does not constitute investment, legal, tax or other advice, and should not be relied on as such. Nothing here is an offer, solicitation, or recommendation to buy/sell/lend any security or to implement any strategy. Any examples and estimates are illustrative only, based on stated assumptions, and are not a guarantee or forecast of results. Actual outcomes will vary and depend on, among other things, portfolio composition, borrow demand, loan rates, utilization, program terms, revenue share, operational constraints, regulatory requirements, and costs.