• EquiLend recovers from cybersecurity incident.
• Next Generation Trading, managing $2.4 trillion monthly, temporarily down.
• Clients, including major stakeholders, relieved as services resume.

EquiLend announced on Friday that it had successfully restored several critical services, including trading and post-trading solutions, more than a week after experiencing a cybersecurity incident involving unauthorized access to its systems.

EquiLend, a key player in securities lending on Wall Street, had revealed in late January that it had detected unauthorized access to a portion of its systems, leading to the temporary shutdown of some services. The affected platform, Next Generation Trading, manages an impressive $2.4 trillion in transactions each month, catering to a diverse client base consisting of nearly 200 asset owners, agency lending banks, broker-dealers, and hedge funds.

The incident prompted EquiLend’s major stakeholders, such as Goldman Sachs, BlackRock, J.P. Morgan, and Bank of America Merrill Lynch, to navigate the challenges arising from the disruption. Market participants were forced to resort to manual processing during the outage, although the impact was reported to be limited, according to a spokesperson at the Financial Services Information Sharing and Analysis Center (FS-ISAC).

Josh Galper, managing principal at capital markets consultancy Finadium, highlighted the potential risks faced by clients during the disruption, stating, “If data were not available from EquiLend, then you’ve got risk managers and liquidity managers who may not know what they have, which impacts their risk ratios and capital ratios, and impacts their ability to both manage internally and to report to regulators.”

Despite the challenges, EquiLend’s restoration of services brings relief to its clientele, mitigating concerns over potential disruptions to regulatory reporting obligations. Galper acknowledged that, with services being gradually reinstated, “the data will get sorted out in time. The reports will get filed. They might be late.”

This incident underscores the growing importance of robust cybersecurity measures in the financial industry and highlights the potential repercussions for market participants and regulatory compliance in the event of a cybersecurity breach.