Sovereign wealth funds (SWFs), and in many instances asset owners, are well positioned to bene t in the securities lending and repo markets as banks and buy-side market participants increasingly turn to them for the high-quality securities they need to conduct business. As other market participants prepare to centrally clear OTC derivatives under the European Market Infrastructure Regulation (EMIR) this year, SWFs can continue to use one- or two-way credit support annexes to lay off risks on sell-side counterparts.
SWFs may be exempt from certain aspects of OTC derivatives reforms, but they are not immune from the threats and opportunities arising from these and related changes to the post-crisis nancial market environment, according to this new research paper produced by BNY Mellon in conjunction with the Judge Business School of the University of Cambridge.
The full report, “OTC Derivatives Reform: Putting Asset Owners and Sovereign Wealth Funds in the Driver’s Seat,” is available online.
