In the previous article we covered the key topics investment managers need to consider when deciding whether to lend their securities. Here we look at the various routes to the market that should be considered once you have decided to lend. The organisational and portfolio characteristics are significant factors in determining the feasible routes to the lending market.
Whilst within the capital markets settlement has well proven settlement platforms, in the B2B market there is a big possibility of innovation. This release covers one such announcement, I expect there will be more from other established players.
A new report published by the International Capital Market Association (ICMA) documents the performance of the investment grade secondary bond market in Europe during the last weeks of February through March and April 2020, as the COVID-19 pandemic caused levels of market volatility and dislocation surpassing those seen during the global financial crisis of 2007-2008.
The BIS have conducated a rigorous study using public metrics to look for a relationship between the amount of CCP capital at risk in the default waterfall, and the behaviour of CCP risk models. I won't spoil the surprise on the outcome, but this appears to be the first quantitative study into the possibility that if a CCP is likely to lose money, they operate more conservative risk models.
The paper covers:
Since 2005 the Monetary Authority of Singapore has been publishing the SORA benchmark each day. The Singapore Overnight Rate Average (SORA) is the volume-weighted average rate of unsecured overnight interbank SGD transactions in Singapore between 9:00 am and 6:15 pm.
Cboe Global Markets plans to reopen its Cboe Options Exchange (C1) trading floor in Chicago and resume trading operations on the floor on Monday, June 8, 2020. Cboe expects approximately 50% of floor participants to return on that day, to a newly configured and larger trading floor.
Upon reopening, the floor will operate under precautionary measures to limit exposure to COVID-19.
Securities Lending has evolved from a back-office operational activity originating in the 1960s/70s – borrowing securities to cover settlement failures and supporting short-selling investment strategies – to a recognised investment management discipline that can be a source of additional alpha and revenue for beneficial owners and investment managers.
Societe Generale has joined FXSpotStream as the platform's 15th liquidity provider.
The platform's liquidity providers are Barclays, BofA, BNP Paribas, Citi, Commerzbank AG, Credit Suisse, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, MUFG, Societe Generale, Standard Chartered, State Street and UBS.
A new regulatory timetable has emerged due to Coronavirus (COVID-19). The recent announcements of a delayed commencement to UMR (Uncleared Margin Rules) and SFTR (Securities Financing Transactions Regulation) allows for clients to utilise the extra time that they have been given. Tie in the timelines for CSDR (Central Securities Depositories Regulations) and Interbank Offered Rates (IBORs) transition and it is now the future that looks very busy and preparing properly is critical