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In July, industry veteran Pasquale "Pat" Cestaro emerged from a securities lending hiatus to join Quadriserv as a vice chairman. Global Investor/ISF spoke to him to find out what drew him back in. Annabelle Palmer reports
Global Investor/isf: You were hired to focus on business development and AQS' interactions with the broker-dealer and prime brokerage sectors. Why is this important to Quadriserv?
Cestaro: Back when I ran Bear Stearns' securities lending business I was unconvinced of the Quadriserv value proposition, but much to the credit of our co-founder, Greg DePetris, and our president, Bruce Turner, they listened attentively to the feedback from the large financial institutions and focused on what problems in the industry could be addressed. As a result of those discussions, AQS Direct came about as an additional venue to the AQS platform.
Broker dealers had asked for an automated venue, tailored to their needs, enabling high volume and large ticket transactions exclusively between OCC [Options Clearing Corporation] clearing members. Having been an active participant in the securities lending arena for over 30 years, I'm hoping I will be able to supplement such communication and collaboration with the leading securities lending and equity finance professionals so we can continue to develop solutions for a more efficient market.
What exactly is AQS Direct?
Quadriserv operates AQS, a central counterparty-based platform that offers automated securities lending trading and a central order book allowing for lower operational costs, and price transparency. This month, Quadriserv launched AQS Direct, a broker-to-broker electronic stock lending venue, with central counterparty clearing that is exclusive to OCC clearing member firms.
Why were you not originally convinced by AQS' value proposition?
Whenever a vendor comes knocking on a door your first question is "what problem are they
BIO: Cestaro was with JPMorgan for two years as the US head of equity finance sales and trading, ending in 2010. For 28 years he was at Bear Stearns where he was senior managing director, responsible for global securities lending. He is a past president of the Securities Lending Division of SIFMA, and a founding participant and former chairman of the board of directors of EquiLend.going to solve for us?" The AQS platform solved a number of problems, however, at the time I was...