Brazil’s securities lending market: From strong demand to scalable growth
27 October 2026
Matt Chessum, executive director, equity and analytic products at S&P Global Market Intelligence, reviews Brazil’s position in the market, from how it compares to other jurisdictions to its potential to create a deeper and more resilient securities lending ecosystem
Image: Shutterstock
Brazil’s securities lending market is entering a potentially important stage of development. Borrowing demand is already established, revenues are rising, and regulatory access has improved. The next phase depends on whether the market can mobilise a broader supply of institutionally held securities while adapting its infrastructure to the needs of both domestic and offshore participants.
The wider industry backdrop is supportive. Global securities lending revenues reached approximately US$8.8 billion during the first half of 2026, an increase of 33 per cent year-on-year (YoY), while average balances rose 31 per cent to nearly US$4 trillion. Growth was led by Asian equities, exchange-traded products and EMEA equities, demonstrating how quickly activity can expand when market volatility, borrower demand, and accessible inventory come together.
Latin America remains much smaller in absolute terms, but its trajectory is notable. Brazil and Mexico generated close to US$70 million of combined revenue during H1 2026, roughly double the equivalent total from the previous year, while combined balances increased by 47 per cent. Brazil contributed approximately US$64 million, supported by a 58 per cent increase in average balances to US$5.4 billion, and a 16 per cent rise in average fees to 2.23 per cent.
The longer-term revenue trend provides context for this growth. Reported revenue rose from around US$0.7 million in 2020 to US$66.2 million in 2025. Within the H1 2026 results outlined above, Azul alone generated US$11.5 million, illustrating the contribution that individual securities with concentrated demand and constrained supply can make to market returns.
By 5 October 2026, Brazil had approximately US$14.4 billion of lendable inventory and US$5.1 billion on loan. Reported revenue of US$116.2 million for 2026 year-to-date (January–September) has also been generated, already close to two times the full-year 2025 figure with three months of the year still left to run.
Supply remains the clearest constraint
Despite this growth, only 1.4 per cent of Brazil’s equity market capitalisation is represented in lendable inventory. This compares with 13.7 per cent in Taiwan and 1.1 per cent in Saudi Arabia, other relatively new markets for lenders. Brazil therefore sits closer to Saudi Arabia in terms of market participation, while Taiwan demonstrates the much greater depth achievable once securities lending becomes embedded across a broad institutional investor base.
The comparison is especially relevant because Brazil already displays stronger borrowing demand than its lendable total might suggest. Its US$4.9 billion on loan represents around 35 per cent of available inventory. Saudi Arabia, by comparison, has US$27.8 billion lendable but only US$1.7 billion on loan, equivalent to roughly 6 per cent. Taiwan has US$677 billion lendable and US$54.5 billion on loan, producing an utilisation rate of around 8 per cent. These figures suggest that Brazil’s immediate opportunity is not simply to create demand, but to provide borrowers with more of the inventory they already require.
The composition of supply is equally important. Government entities account for 70.9 per cent of Brazil’s lendable ownership, while mutual funds contribute 18.8 per cent and pension funds 5.6 per cent. In Taiwan, mutual funds provide 58.5 per cent of supply, while in Saudi Arabia they contribute 61.6 per cent. Pension funds add a further 11.5 per cent and 19.8 per cent respectively. Bringing more Brazilian mutual and pension fund assets into lending programmes could therefore diversify supply and make the market less dependent on a narrow group of providers.
Growth, however, should remain demand-led. Selected Brazilian equities have historically generated exceptionally high average fees, including Natura, Azul, and Brava Energia. These stocks are not representative of the entire market, but they demonstrate the value of scarce and highly sought-after inventory. Additional supply could reduce scarcity premiums, making careful inventory selection more commercially effective than an indiscriminate expansion of the lendable pool.
Building the infrastructure for international participation
Regulatory and operational development will determine how much of this potential can be converted into sustainable activity. Brazil’s Joint Resolution 13, effective from 1 January 2025, simplified foreign investor access and removed an important obstacle to international participation. Meanwhile, industry work is addressing offshore collateral, reconciliation, recalls, settlement deadlines, billing conventions, buy-ins, and the interaction between offshore lenders, local brokers, and B3.
The International Íø±¬³Ô¹Ï Lending Association (ISLA) Americas’ Latin America Working Group is contributing to this broader effort by bringing together investors, lenders, borrowers, service providers, and exchanges to advance market practices and regulatory frameworks. Its work to improve accessibility and align regional markets, including Brazil, with global standards aims to create new opportunities for both lenders and borrowers.
Trade associations play an important role as a conduit between regulators, market bodies, and investors, helping translate policy objectives and commercial needs into workable market arrangements. By bringing domestic and international participants together, they provide a forum for identifying barriers, agreeing priorities, and developing shared solutions. Building consensus around practical reforms and embedding agreed best practice remains the most effective route to lasting progress: it gives participants a common framework and helps turn improved access into sustainable activity.
Lendable value Brazilian equities
The transition towards T+1 settlement, currently targeted for 2028, adds urgency to these conversations. Brazil’s existing operational timelines can be difficult to reconcile with offshore investment management processes, particularly when recalls and sale instructions arrive late in the trading day. Standardised post-trade arrangements, effective testing, and stronger connectivity between domestic and international participants will therefore be essential.
Taiwan provides the long-term scale comparison, while Saudi Arabia offers a more recent example of how lending can develop alongside broader market reform. Brazil’s route will be different from both. Its advantage is that borrower demand, fee opportunities, and commercial momentum are already visible. If the market can broaden institutional supply, improve operational compatibility, and target the securities borrowers value most, Brazil could move from a high-return but relatively concentrated market towards a deeper and more resilient securities lending ecosystem.
The wider industry backdrop is supportive. Global securities lending revenues reached approximately US$8.8 billion during the first half of 2026, an increase of 33 per cent year-on-year (YoY), while average balances rose 31 per cent to nearly US$4 trillion. Growth was led by Asian equities, exchange-traded products and EMEA equities, demonstrating how quickly activity can expand when market volatility, borrower demand, and accessible inventory come together.
Latin America remains much smaller in absolute terms, but its trajectory is notable. Brazil and Mexico generated close to US$70 million of combined revenue during H1 2026, roughly double the equivalent total from the previous year, while combined balances increased by 47 per cent. Brazil contributed approximately US$64 million, supported by a 58 per cent increase in average balances to US$5.4 billion, and a 16 per cent rise in average fees to 2.23 per cent.
The longer-term revenue trend provides context for this growth. Reported revenue rose from around US$0.7 million in 2020 to US$66.2 million in 2025. Within the H1 2026 results outlined above, Azul alone generated US$11.5 million, illustrating the contribution that individual securities with concentrated demand and constrained supply can make to market returns.
By 5 October 2026, Brazil had approximately US$14.4 billion of lendable inventory and US$5.1 billion on loan. Reported revenue of US$116.2 million for 2026 year-to-date (January–September) has also been generated, already close to two times the full-year 2025 figure with three months of the year still left to run.
Supply remains the clearest constraint
Despite this growth, only 1.4 per cent of Brazil’s equity market capitalisation is represented in lendable inventory. This compares with 13.7 per cent in Taiwan and 1.1 per cent in Saudi Arabia, other relatively new markets for lenders. Brazil therefore sits closer to Saudi Arabia in terms of market participation, while Taiwan demonstrates the much greater depth achievable once securities lending becomes embedded across a broad institutional investor base.
The comparison is especially relevant because Brazil already displays stronger borrowing demand than its lendable total might suggest. Its US$4.9 billion on loan represents around 35 per cent of available inventory. Saudi Arabia, by comparison, has US$27.8 billion lendable but only US$1.7 billion on loan, equivalent to roughly 6 per cent. Taiwan has US$677 billion lendable and US$54.5 billion on loan, producing an utilisation rate of around 8 per cent. These figures suggest that Brazil’s immediate opportunity is not simply to create demand, but to provide borrowers with more of the inventory they already require.
The composition of supply is equally important. Government entities account for 70.9 per cent of Brazil’s lendable ownership, while mutual funds contribute 18.8 per cent and pension funds 5.6 per cent. In Taiwan, mutual funds provide 58.5 per cent of supply, while in Saudi Arabia they contribute 61.6 per cent. Pension funds add a further 11.5 per cent and 19.8 per cent respectively. Bringing more Brazilian mutual and pension fund assets into lending programmes could therefore diversify supply and make the market less dependent on a narrow group of providers.
Growth, however, should remain demand-led. Selected Brazilian equities have historically generated exceptionally high average fees, including Natura, Azul, and Brava Energia. These stocks are not representative of the entire market, but they demonstrate the value of scarce and highly sought-after inventory. Additional supply could reduce scarcity premiums, making careful inventory selection more commercially effective than an indiscriminate expansion of the lendable pool.
Building the infrastructure for international participation
Regulatory and operational development will determine how much of this potential can be converted into sustainable activity. Brazil’s Joint Resolution 13, effective from 1 January 2025, simplified foreign investor access and removed an important obstacle to international participation. Meanwhile, industry work is addressing offshore collateral, reconciliation, recalls, settlement deadlines, billing conventions, buy-ins, and the interaction between offshore lenders, local brokers, and B3.
The International Íø±¬³Ô¹Ï Lending Association (ISLA) Americas’ Latin America Working Group is contributing to this broader effort by bringing together investors, lenders, borrowers, service providers, and exchanges to advance market practices and regulatory frameworks. Its work to improve accessibility and align regional markets, including Brazil, with global standards aims to create new opportunities for both lenders and borrowers.
Trade associations play an important role as a conduit between regulators, market bodies, and investors, helping translate policy objectives and commercial needs into workable market arrangements. By bringing domestic and international participants together, they provide a forum for identifying barriers, agreeing priorities, and developing shared solutions. Building consensus around practical reforms and embedding agreed best practice remains the most effective route to lasting progress: it gives participants a common framework and helps turn improved access into sustainable activity.
Lendable value Brazilian equities
The transition towards T+1 settlement, currently targeted for 2028, adds urgency to these conversations. Brazil’s existing operational timelines can be difficult to reconcile with offshore investment management processes, particularly when recalls and sale instructions arrive late in the trading day. Standardised post-trade arrangements, effective testing, and stronger connectivity between domestic and international participants will therefore be essential.
Taiwan provides the long-term scale comparison, while Saudi Arabia offers a more recent example of how lending can develop alongside broader market reform. Brazil’s route will be different from both. Its advantage is that borrower demand, fee opportunities, and commercial momentum are already visible. If the market can broaden institutional supply, improve operational compatibility, and target the securities borrowers value most, Brazil could move from a high-return but relatively concentrated market towards a deeper and more resilient securities lending ecosystem.
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