Posts by Josh Galper

Cum-ex, New York Times

It May Be the Biggest Tax Heist Ever. And Europe Wants Justice. They made quite a team. One was an Oxford-educated wunderkind who handled the complicated math behind the transactions.…

Trade associations warn EU regulators of CSDR mandatory buy-in regime’s damaging impacts to EU markets

January 24, 2020

CSDR, mandatory buy-ins

Joint Trade Association Letter regarding Implementation of the CSDR Settlement Discipline Regime We support the imposition of a penalty regime under CSDR as an important step towards improving settlement efficiency…

ECB launches review of its monetary policy strategy

January 24, 2020

Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices Other considerations, such as financial stability, employment and environmental sustainability, will also…

SIFMA Video: Why Capital Markets Matter

January 23, 2020

capital markets, SIFMA

Businesses, governments and municipalities at home and around the world look to the U.S. when they need to raise capital. Why does that matter? The strength of our capital markets…

Bank of England blog: Margin call! Cash shortfall?

January 23, 2020

Bank of England, collateral, Margin

Participants in derivative markets collect collateral from their counterparties to help secure claims against them should they default. This practice has become more widespread since the 2007-08 financial crisis, making…

Evidence on whether passive funds are disrupting the price discovery mechanism

January 23, 2020

ETFs, Investments

Blackrock, ETFs, Fama, French, Passive investing, topstory, Vanguard

An important function of capital markets is creating price discovery for the value of traded assets. The idea is that billions of investors should decide what they think the fair…

Clearstream receives CSDR licence for its German CSD

January 22, 2020

Deutsche Börse Group’s post-trade services provider Clearstream has obtained the CSDR licence for Clearstream Banking AG, its German central securities depository. The licence was granted by the German Federal Financial…

ARRC Releases Consultation on Potential Spread Adjustment Methodologies

January 21, 2020

ARRC, LIBOR, SOFR, spreads

The Alternative Reference Rates Committee (ARRC) today released a consultation on spread adjustment methodologies for cash products referencing U.S. dollar (USD) LIBOR. These spread adjustments are intended for use in…

FundFire: JP Morgan Makes Equity Investment in Arcesium

January 21, 2020

J.P. Morgan has made an equity investment in Arcesium, the post-trade technology and professional services firm launched by hedge fund D.E. Shaw in 2015 and later spun out as a…

Broadway Technology Adds Repo Functionality to Global FICC Trading Platform

January 21, 2020

Broadway Technology, Repo

Broadway Technology, a leading provider of high-performance fixed income and foreign exchange front-office solutions, today announced it has rolled out extensive new functionality for repurchase agreement (repo) trading on its…

FSB report finds no net change in repo positions of non-bank intermediaries

January 21, 2020

FSB, Non-Bank financial intermediation, Repo

Global Monitoring Report on Non-Bank Financial Intermediation 2019 OFIs continue to be net providers of cash to the financial system through reverse repos, while banks remain net recipients of cash…

“Transparency and accountability”: will Fed Governor Randal Quarles’ proposals lead to efficiency or a lack of supervision? (Premium)

January 21, 2020

Federal Reserve, Regulatory

Federal Reserve, Financial Stability Board, Randal Quarles, Regulation, topstory

As Fed Vice Chair for Financial Supervision and Chair of the Financial Stability Board (FSB), Randal Quarles leads part of the global conversation about regulation or deregulation of banks. His…

Client Training: Finadium’s securities lending, repo and hedge fund databases

January 20, 2020

Finadium Event, Hedge Funds, Prime Brokerage, Repo, Securities Lending

Data, leverage funds, Prime Brokerage, Repo, Securities Lending, topstory

Finadium will present an online training session for our clients: Finadium’s securities lending, repo and hedge fund databases will run on Wednesday February 5, 2020 at 10AM EST / 3PM GMT…

Variable €STR volumes make us wonder about other European benchmarks (Premium)

January 20, 2020

ECB, ESTR, Europe, Interest rates, SONIA, UK

€STR, Benchmarks, ECB, SONIA, topstory

Volumes in €STR, the European Central Bank reference rate launched in October 2019, have been variable since the launch. Although the initial expectation was that €STR would see 36,000 transactions…

RMA releases SFTR compliance tool

January 16, 2020

RMA, SFTR

The Securities Lending Council of the Risk Management Association is pleased to announce the release of a new standard legal agreement to address mandatory reporting obligations under Article 4 of…

UK authorities urge action on LIBOR to SONIA switch

January 16, 2020

Bank of England, Financial Conduct Authority, LIBOR, SONIA, Working Group on Sterling Risk-Free Reference Rates

The Bank of England (the Bank), Financial Conduct Authority (FCA) and the Working Group on Sterling Risk-Free Reference Rates (RFRWG) have published a set of documents today, outlining priorities and…

The door opens for an SA-CCR in securities finance

January 16, 2020

Derivatives, Pro-cyclicality, Regulatory

ESRB, Margin, OTC derivatives, SA-CCR, securities finance, topstory

The European Systemic Risk Board published last week an innocuously titled document called “Mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions“. The early pages,…

Webinar replay: An Intro to Collateralized Transactions for Students and New Professionals (Premium)

January 15, 2020

Collateral Management

collateral trading, Repo, Securities Lending, topstory, Total Return Swaps

Finadium clients can access the webinar replay and slides here. Continue reading

DTCC and Euroclear unwind GlobalCollateral joint venture

January 15, 2020

DTCC, Euroclear, GlobalCollateral

Since DTCC-Euroclear GlobalCollateral was formed in 2014, we have been very pleased with industry receptiveness to the Margin Transit Utility (MTU) and the Collateral Management Utility (CMU). The market is…

WSJ: Hedge Funds Could Make One Potential Fed Repo-Market Fix Hard to Stomach

January 14, 2020

Federal Reserve, hedge funds, Repo, WSJ

One hurdle to a possible fix for recent volatility in the short-term cash markets: hedge funds. As part of its stated goal of reducing repo-market volatility, the Federal Reserve is…

ESMA values the European Alternative Investment Fund market at €5.8 trillion

January 14, 2020

AIF, ESMA, Europe

The European Securities and Markets Authority (ESMA) today published its second statistical report on European Union (EU) Alternative Investment Funds (AIF). The study found that the EU AIF sector in…

Finadium: Are You Ready for DTCC’s Equity Finance CCP?

January 14, 2020

CCP, Market infrastructure, Securities Lending

CCP, DTCC, equity finance, Finadium, NSCC, Securities Lending, topstory

DTCC’s equity finance central counterparty (CCP), expected to launch in early 2021, has the potential to change long-held patterns in the securities lending industry, both in the US and abroad.…

ISDA, Clifford Chance, R3 and the Singapore Academy of Law Publish Smart Contracts Paper

January 13, 2020

Clifford Chance, DLT, ISDA, R3, Singapore Academy of Law, smart contracts

The International Swaps and Derivatives Association, Inc. (ISDA), Clifford Chance, R3 and the Singapore Academy of Law have published a new whitepaper that provides analysis on the legal issues relating…

SFTR final rules come into focus: a conversation with UnaVista’s Catherine Talks

January 13, 2020

Regulatory, SFTR

ESMA, LEIs, securities finance, SFTR, topstory

Securities Finance Monitor spoke with Catherine Talks, Product Manager at UnaVista, about ESMA’s final Guidelines for SFTR reporting released last week. Our conversation untangled the technical language of the documentation…

RepoClear hits record €212 trillion nominal in 2019, up 7% from 2018

January 11, 2020

LCH delivers record clearing volumes in 2019 Thu, 09/01/2020 Innovations include launch of FX forwards clearing, €STR swaps, consolidation of Euro-debt activity at LCH SA and increased venue connectivity at…

Bank of England: Impact of IFRS 9 on the cost of funding of banks in Europe

January 10, 2020

Bank of England, IFRS 9

Staff Working Paper No. 851 By Robert Bock, Mahmoud Fatouh and Jamal Ouenniche On implementation, IFRS 9 increases credit loss (impairment) charges and reduces after-tax profits of banks. This makes…

ESRB proposes part of an SA-CCR for securities financing transactions

January 9, 2020

ESRB, Haircuts, margins, SA-CCR, securities financing transactions

The European Systemic Risk Board (ESRB) has today published a report on mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions. The report expands on…

Problems with US SEC filings on securities lending: the case of BMO Global Asset Management

January 9, 2020

Investments, SEC, Securities Lending

BMO GAM, Dreyfus, mutual funds, sec, Securities Lending, topstory

US mutual fund and ETF filings on securities lending with the US Securities and Exchange Commission continue to be a mix of spot-on accurate and decidedly off-beat. They can require…

Man Institute notes structural changes in the hedge fund industry for 2020

January 8, 2020

hedge funds, Man Institute

Man FRM Early View – December 2019 As we enter 2020, the hedge fund universe feels like it has morphed again. Bigger is better (or at least, more resilient) and…

HKEX plans to expand Bond Connect repo trading and clearing

January 7, 2020

Bond Connect, HKEX, Repo

Clear Vision for a New Decade Charles Li What does 2020 and the next decade hold? How will geopolitics, global economics and technological innovations impact our lives? More importantly for…

FCA and Bank of England announce proposals for data reforms across the UK financial sector

January 7, 2020

The Financial Conduct Authority (FCA) and the Bank of England (Bank) today outlined their plans to develop their data and analytics capabilities. Both authorities depend on access to high-quality data…

We size the global collateral markets at $19.8 trillion (Premium)

January 7, 2020

CCP, Collateral Management, Derivatives, Repo, Securities Lending

collateral, OTC derivatives, Repo, Securities Lending, topstory

Finadium conducted a market sizing exercise of the global collateral markets, including a diversity of collateral product types held by private sector market participants. Here’s what we found. Continue reading

ESMA publishes final Guidelines on reporting under Articles 4 and 12 SFTR

January 6, 2020

ESMA, SFTR

This Final report on Guidelines on reporting under SFTR contains the assessment of the feedback received from stakeholders on key elements of ESMA Guidelines on reporting under SFTR. The Guidelines…

ESMA provides 12 month extension on LEIs for non-EU counterparties under SFTR

January 6, 2020

ESMA, LEIs, SFTR

The LEI requirement has an impact on the counterparties to an SFT that are legal entities, on all issuers of securities which are lent, borrowed or provided as collateral in…

ECB: how central banks can absorb liquidity risk from shadow banking

January 6, 2020

Central Banks, ECB, Shadow Banking

ECB Working Paper Series Unconventional monetary policy and funding liquidity risk No 2350 / January 2020 This paper investigates the efficiency of various monetary policy instruments to sta- bilize asset…

Three lessons learned and the data from US repo in the last days of 2019 (Premium)

January 6, 2020

Federal Reserve, Repo, US

Federal Reserve, GCF, Repo, topstory

Year end 2019 in the US repo markets were notably calm due to the heavy dose of liquidity promised by the Federal Reserve. The sky didn’t fall, no crisis happened…

FT: Bank of Japan’s securities lending facility for ETFs set to avert liquidity squeeze

January 4, 2020

Bank of Japan, ETFs, Securities Lending

Japan acts to avert ETF market liquidity squeeze The Bank of Japan has launched an unusual lending facility for exchange traded funds as it tries to mitigate the market impact…

OCC’s securities lending CCP decreased by 4% in Dec 2019, year over year

January 2, 2020

CCP, OCC, Securities Lending

OCC’s securities lending CCP activity decreased by 4.07 percent in new loans from December 2018 with 102,583 transactions last month. Annual stock loan activity decreased 5.27 percent from 2018 with…

DataLend reports 13% decline in 2019 securities lending revenues, to $8.66 billion

January 2, 2020

DataLend, Equilend, Securities Lending

The global securities finance industry generated $8.66 billion in revenue for lenders in 2019, according to market data provider DataLend. While 2018 was a record amongst recent years for securities…

CACEIS and Santander Securities Services merger closes, creates custodian with €3.9 trillion AUC

December 27, 2019

CACEIS, Santander Securities Services

23 December 2019 Crédit Agricole S.A and Santander announce the closing of the strategic combination of CACEIS and Santander Securities Services and the creation of a major global player Crédit…

Bank of England: Simulating liquidity stress in the derivatives market

December 22, 2019

Bank of England, collateral calls, Margin, OTC derivatives, Repo

By Marco Bardoscia, Gerardo Ferrara, Nicholas Vause and Michael Yoganayagam We investigate whether margin calls on derivative counterparties could exceed their available liquid assets and, by preventing immediate payment of the…

ESMA updates ISO 20022 XML schemas for SFTR reporting

December 22, 2019

ESMA, SFTR

The European Securities and Markets Authorty (ESMA), the EU’s securities markets regulator, has published updated ISO 20022 XML Schemas to be used for reporting under the Securities Financing Transactions Regulation…

Why we’re here: an argument for capital markets

December 19, 2019

Regulatory

capital markets, topstory

Many people work in capital markets for the profit motive, and that’s a legitimate cause. But in doing so, they are also serving a social objective that includes capital formation…

SEC issues new rules for uncleared Security-Based Swaps

December 18, 2019

sec, security-based swaps

SEC Adopts Actions to Stand Up Security-Based Swap Regulatory Regime The Securities and Exchange Commission today adopted a package of rule amendments, guidance, and a related order to expand and…

CFTC Provides Relief to Market Participants Transitioning Away from LIBOR

December 18, 2019

CFTC, LIBOR, SOFR

Three divisions of the U.S. Commodity Futures Trading Commission today announced that each has issued a no-action letter that provides relief to swap dealers and other market participants as it…

BIS: Central banking in challenging times

December 18, 2019

Since the Great Financial Crisis, central banks have been facing a triple challenge: economic, intellectual and institutional. The institutional challenge is that central bank independence – a valuable institution –…

Northern Trust expands OTC derivatives collateral services

December 17, 2019

collateral management, Northern Trust, OTC derivatives

Northern Trust (Nasdaq: NTRS) is expanding its collateral management services for over-the-counter (OTC) derivatives trading. The new functionality will enable asset managers and institutional investors to outsource key aspects of…

US agencies approve resolution plans for all banks, find shortcomings in six of eight

December 17, 2019

Federal Reserve, resolution plans

The Federal Reserve Board and Federal Deposit Insurance Corporation announced Tuesday that they did not find any “deficiencies,” which are weaknesses that could result in additional prudential requirements if not…

Fed extends SOFR Averages and SOFR Index comments to Jan 10 2020

December 17, 2019

Federal Reserve, SOFR