Buy-side attendees on both the beneficial owner and hedge fund sides of the securities lending market are starting to think about the Finadium Investors in Securities Lending conference on May 17-18, 2023. To help get a handle on what themes to look out for and key questions to ask, we’ve prepared a reading packet. Buy-side attendees are invited to check out these recent articles to get their heads in the game.
Indemnification is appreciated, but does it cause more harm than good for beneficial owners? Indemnification in securities lending has been a recognized part of the business for over three decades and is a must-have for most beneficial owner clients. But is indemnification still necessary for the majority of clients when balance sheets are reinforced by Basel III, and clients are engaged in peer-to-peer and central counterparties (CCPs)? In this article with State Street Securities Finance, we evaluate the pros and cons of indemnification in the current market environment. Read more
Some agent lenders and some repo dealers are converging in their service offerings for clients In recent surveys of agent lenders and US repo dealers conducted by Finadium, parts of each group say that they are headed towards similar or the same end goals in the services they offer clients. The language can be nuanced but the theme keeps showing up in multiple ways. The area of convergence is providing liquidity, collateral and advisory services that help clients expand out of a silo for one trading product and into optimizing funding and financing across the firm. In our 2022 Agent Lender Survey, we heard that a segment of agents are asking themselves “how else can client liquidity needs be supported?” Read more
SFM Interview: J.P. Morgan’s Paramanathan on EAD benefits to agent lenders from Basel III endgame Changes to Basel III rules on the calculation of Exposure at Default (EAD) should result in considerable reduction of RWA penalties for bank-affiliated agent lenders. We spoke with Chelvi Paramanathan, global head of Pricing and Analytics for Agency Securities Finance and Collateral Services at J.P. Morgan, about expected impacts of the revisions in effect from January. Read more
Revenues and Policy Choices for US Mutual Funds in Securities Lending Increased competition in securities lending means that to maintain a leading program, US mutual fund managers should assess their policy choices, use of technology and routes to market. A combination of partnering with an agent lender and developing capabilities in-house can help managers meet their key objectives. A guest article with Fidelity Agency Lending. Read more