TORONTO and LIMA, Mar 28, 2019 (Canada NewsWire via COMTEX) — Enhanced Securities Lending Platform enables non-Peruvian investors to borrow and lend securities in Peru and make available an additional US$ 4 billion in Peruvian stock to the market
The Bolsa de Valores de Lima (“BVL”), along with Cavali ICLV S.A. (the Peruvian Central Securities Depository, CSD), Scotia Capital USA, Scotia Sociedad Agente de Bolsa S.A. (“Scotia Bolsa”), Citibank del Peru S.A. (“Citi Peru”) and pension fund manager, AFP Integra, has introduced a new securities lending platform in Peru that enhances the Peruvian market depth, liquidity and efficiency and provides clients with greater opportunity to invest in Latin America.
“Stock lending is a solution that complements efforts to boost local liquidity by facilitating price formation, channel funds back to the market, and attract new kinds of investors,” said Miguel Ángel Zapatero, Head of Business of Bolsa de Valores de Lima.
“AFP Integra has worked with Scotia Capital, Scotia Sociedad Agente de Bolsa, Cavali and the BVL to develop sustainable processes for securities lending in local markets, enhancing our controlling and reporting systems to prevent and reduce risks associated with these types of transactions,” said Jean Pierre Fournier Romero, Chief Investment Officer, Equities, AFP Integra. “We strongly believe that securities lending will provide more liquidity and alternatives to trade Peruvian assets.”
“Scotia Sociedad Agente de Bolsa was instrumental in the development and subsequent testing of procedures for the enhanced model,” said Cristina León Jim�nez, Head of Scotia Bolsa. “Our objective was to meet the standards of both local and international clients while bringing the expertise of our global platform for the benefit of the market.”
“Scotiabank is proud to work with the Bolsa de Valores de Lima and Peruvian partners to enhance the local securities lending platform and to extend its availability to non-Peruvian investors,” said John Stracquadanio, Head of U.S. Capital Markets, Prime Services, Collateral Management & Funding, and U.S. Equities at Scotiabank. “Scotia Bolsa, the brokerage arm of Scotiabank Peru, worked directly with clients to build a securities lending offer that helps to maximize holdings of institutional investors.”
“This offering is the result of an outstanding collaborative effort from infrastructure providers to investors and intermediaries that facilitates non-domiciled investors access to market and contributes in developing the Peruvian capital market,” said Diego Castro, Head of Securities Services, Citibank del Peru S.A.
Access to securities lending on the platform requires the services of a local broker dealer, such as Scotia Bolsa, to execute the trade on behalf of the foreign broker.
The enhanced platform includes a formal legal structure incorporating industry standard documentation, Peruvian Appendix to the Global Master Securities Lending Agreement (GMSLA), an operating platform that allows for USD and equity as collateral as well as full visibility into the Cavali’s Wari platform via Citi Peru’s custody and clearing services.
The enhancement is the result of a two year process working amongst all relevant parties including the local market entities aimed at breaking down the local barriers to entry.