CCP

Banks will see their clearing business become bifurcated by tail–risk and credit intermediation, part of which will stay on their balance sheet, alongside a service and infrastructure piece that will…

The CFTC proposal on Federal Reserve banks holding CCP client deposits

June 9, 2016

CCP, Dodd-Frank, Federal Reserve, Regulatory, US

Central Banks, CFTC, commercial banks, Federal Reserve, topstory

The CFTC has issued a minor proposal and request for comment that Federal Reserve banks be exempted from certain provisions of the Commodities Exchange Act and hold segregated client assets.…

We review the OFR’s “A Map of Collateral Uses and Flows.” What is this paper telling us? (Premium)

May 31, 2016

CCP, col2, Collateral Management, US

collateral, funding, OFR, topstory

The Office of Financial Research (OFR) released a white paper last week, “A Map of Collateral Uses and Flows.” This paper, written by Morgan Stanley’s Tom Wipf and Andrea Aguiar;…

CCP collateral holdings of US$650 billion – our analysis on new filings (Premium)

May 25, 2016

CCP, col4, Collateral Management, IOSCO

cash, CCPs, collateral, CPMI-IOSCO, IOSCO, non-cash, topstory

We recently gathered up the latest CCP CPMI-IOSCO quantitative disclosures to see what they told us about CCP collateral holdings at the end of Q4 2015. We found $650 billion…

A look at the latest OTC derivatives statistics from the BIS

May 18, 2016

CCP, Delta One, Derivatives

Bank for International Settlements, ISDA, OTC derivatives, topstory

The Bank for International Settlements recently published its statistics on OTC derivatives trading activity as of end-December 2015. While the headline figure is an 11% decline in OTC activity from…

Report highlight: securities lending agents on banks sharing balance sheet benefits in loan fees (Premium)

May 12, 2016

Basel III, CCP, Collateral Management, Prime Brokerage, Securities Lending

Agent Lenders, CCPs, prime brokers, Securities Lending, topstory

As banks work to optimize their balance sheets, agent lenders are a source of possible assistance. The conversation is all about collateral and term: what collateral will agents accept on…

Securities Lending Agents on Prime Broker Borrowers: A Finadium Survey

May 11, 2016

CCP, Collateral Management, Securities Lending

Agent Lenders, CCPs, Finadium, prime brokers, Securities Lending, topstory

A new survey from Finadium finds that 89% of securities lending agents say that technology is now an important consideration in who receives securities loans; 78% say they are willing…

Responses to Treasury Market Structure RFI encourage repo clearing (Premium)

May 5, 2016

CCP, Fixed Income, Investments, Repo, SEC, US

market structure, repo CCP, topstory, treasuries, US Treasury

In January 2016 the US Treasury issued an RFI, “Notice Seeking Public Comment on the Evolution of the Treasury Market Structure.” The questions were pretty broad, covering “changes in technology,…

Financing tools for synthetic prime brokerage in derivatives and physical markets

April 18, 2016

Salim Nemouchi

CCP, Delta One, Derivatives, Featured, Prime Brokerage

BTIC, CME, Delta One, Prime Brokerage, Societe Generale, synthetic financing, topstory

Delta One and synthetic financing businesses continue to command attention at prime brokerage firms, the result of a complex web of regulations and client needs that direct business to these…

Eurex’s ‘special membership’ for buy side shifts counterparty risk

April 14, 2016

CCP, Central Counterparties

Clearing, Deutsche Borse, Eurex, Eurex Clearing, insurance companies, ISA Direct, pension funds, topstory

Deutsche Borse’s derivatives clearing house, Eurex Clearing, is set to provide direct access to the buy side with a new category of clearing membership called ISA Direct. Until July, the…

Funds Transfer Pricing and the Quest for Term Funding: Working Towards New Solutions

April 13, 2016

Michael Cyrus

CCP, Collateral Management, Repo, Technology

CCPs, collateral optimization, DekaBank, Funds Transfer Pricing, Michael Cyrus, Repo, topstory

Funds Transfer Pricing (FTP) is emerging as not just a nice to have, helpful tool in managing a financial services business, but in some cases has become a regulatory necessity.…

What would blockchain mean for "cash" and "credit" in funding? (Premium)

March 8, 2016

Richard Stinchfield

Bitcoin, Blockchain, Cash management, CCP, Central Counterparties, Collateral Management, Credit Exposure, Liquidity Management, Risk Management, Securities Lending, Technology

blockchain, cash management, Credit Exposure, credit intermediation, Settlements, topstory

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GSF Summit: What the shift to collateral driven markets means for repo (Premium)

February 11, 2016

CCP, Collateral Management, Derivatives, Repo

BNP Paribas, Citigroup, Clearstream GSF, Leverage Ratio, Societe Generale, topstory

Cash has almost become a secondary consideration in the shift to a secured world, and that means collateral is grabbing the steering wheel in driving the market forward. Such a…

The CCP skin in the game debate continues: sources say it isn't helpful (Premium)

January 14, 2016

CCP, Financial Stability Board, Regulatory

CCPs, Financial Stability Board, recovery, Resolution, skin in the game, topstory

Banks and buy side firms have been calling for an increase to the slice of the risk waterfall stumped up by CCPs. They reckon this would make CCPs more resilient,…

The DTCC old stock borrow program could be a solution to new capital problems (Premium)

January 11, 2016

Richard Stinchfield

CCP, Central Counterparties, Credit Exposure, Market infrastructure, Securities Lending

CCPs, Central Securities Depositories, DTCC, Securities Lending, topstory

What if there was a centrally cleared facility through a US Central Securities Depository (CSD) that would automatically allow a broker with excess availability to lend securities to another broker…

Market feedback on Eurex's Lending CCP: so far so good but more work is needed (Premium)

January 7, 2016

CCP, Europe, Securities Lending

Eurex Clearing, Lending CCP, Securities Lending, topstory

Eurex’s Lending CCP remains the market’s leading option for bringing the sell-side and buy-side together for cleared securities lending. While experts and participants believe widespread adoption is inevitable and are…

“The Ballad of the Repo Trader” by Bloomberg’s Tracy Alloway

December 3, 2015

Basel III, CCP, Central Counterparties, Cleared Interest Rate Swaps, Collateral Management, Derivatives, Dodd-Frank, Featured, Federal Reserve, Lehman, Regulatory, Repo

Bloomberg, Repo, topstory, Tracy Alloway

We couldn’t let the week pass without acknowledging Bloomberg’s November 25th article by Tracy Alloway “The Ballad of the Repo Trader”. Published just before Thanksgiving, we wonder if a lot of people…

Non-cleared margin rules will have serious knock-on effects to securities financing markets

December 2, 2015

Basel III, CCP, Central Counterparties, Collateral Management, Custodians, Derivatives, Dodd-Frank, Featured, Market infrastructure, Regulatory, Repo, Risk Management

ISDA, non-cleared derivatives, PwC, topstory

Late in October, US regulators announced final rules for margining of non-cleared dereivatives. This topic has been controversial since it imposes margin requirements where there often weren’t any before and…

Fed Governor Powell on repo CCPs: the opportunities and challenges ahead

November 19, 2015

Federal Reserve, Federal Reserve Governor Powell, topstory

CCP, Central Counterparties, Collateral Management, Dodd-Frank, Featured, Federal Reserve, Hedge Funds, Market infrastructure, Money Market Funds, Regulatory, Repo, Securities Lending, Tri-Party Repo

Earlier this week Fed Governor Jerome Powell gave an interesting speech at the Clearinghouse annual meeting, “Central Clearing in an Interdependent World”, addressing expanding central clearing for repo.Continue reading

More on the SFT stay protocol and the buy-side. Is this Hobson’s Choice?

November 18, 2015

CCP, Central Counterparties, Derivatives, Dodd-Frank, Europe, Featured, Financial Stability Board, Repo, Risk Management, Securities Lending

CCP, Eurex, FICC, OCC, topstory

The adaptation of the ISDA stay protocol to securities financing trades won’t be welcome news for buy-side participants. Adding a delay before executing a liquidation adds incremental risk, even if it…

Inter-clearer FICC tri-party trading at DTCC will come to an end in July, 2016. Did the Fed just get impatient?

November 11, 2015

CCP, Central Counterparties, Collateral Management, Credit Exposure, Featured, Federal Reserve, Regulatory, Repo, Systemic Risk, Tri-Party Repo

BNY Mellon, FICC, JP Morgan, Repo, topstory, tri-party repo

Last week DTCC made an announcement they would, as of July 15, 2016, no longer support FICC trades that go across clearing banks. The text of the announcement can be…

Derivatives, Securities Financing and the Law of Conservation: Transforming Counterparty Risk into Liquidity Risk

November 3, 2015

Basel III, CCP, Central Counterparties, Cleared Interest Rate Swaps, Credit Exposure, Derivatives, Dodd-Frank, Featured, Liquidity Management, Regulatory, Repo, Risk Management

Law of Conservation, Physics, topstory

A former physicist, now Wall Street risk and regulation quant, said at a recent conference that when thinking about regulation, he is reminded of the Law of Conservation. That is…

With non-cash trades on the rise, will indemnification become an issue for sec lending agents?

October 27, 2015

Basel III, CCP, Central Counterparties, Featured, Securities Lending

Indemnification, ISLA, RWA, Securities Lending, topstory

The cost and availability of indemnification of beneficial owners by securities lenders is a perennial topic at conferences. But it is not clear that the dire warnings about cost and…

New from the BIS: the impact of CCP margin policies on repo markets

October 12, 2015

CCP, Collateral Management, Europe, Market infrastructure, Repo

Bank for International Settlements, BIS, CCP, Italy, LCH.Clearnet, MTS, Repo, topstory

As regulators continue their push/pull with moving collateralized trading business onto CCPs (they’re good for risk management, but wait, they’re also the next too-big-to-fail institutions!), the Bank of International Settlements…

What’s Next for Securities Finance Technology Vendors?

September 22, 2015

Basel III, CCP, Collateral Management, Featured, Securities Lending, Technology

CCP, collateral management, Pirum, Regulation, Securities Lending, STP, technology, topstory

The dizzying array of new regulation in financial markets is forcing change on all market participants. Securities technology vendors that think through not only today’s challenges but also tomorrow’s are…

The Bank of England on regulatory arbitrage, CCPs for OTC derivatives and more

September 21, 2015

Bank of England, CCP, Derivatives, Europe, Regulatory

Bank of England, cash, CCPs, Haldane, OTC derivatives, regulatory arbitrage, ring-fencing, topstory

A slew of recent publications from the Bank of England, some as part of their Q3 Quarterly Bulletin and some separate, should be considered both for reading the tea leaves…

ISLA’s 3rd Securities Lending Market Report shows an industry adapting well to market and regulatory changes

September 16, 2015

Basel III, CCP, Central Counterparties, Collateral Management, Europe, Featured, Securities Lending

cash vs. non-cash, collateral, ISLA, non-cash collateral, Securities Lending, topstory

ISLA has released their 3rd Securities Lending Market Report. It is extremely well written with data and thoughtful analysis. In this post we take a look at securities lending in…

A buy-side cost/benefit analysis for securities lending CCPs

September 10, 2015

Gerard Denham

CCP, Credit Exposure, Featured, Investments, Securities Lending

buy-side, CCPs, Eurex Clearing, Indemnification, Lending CCP, Securities Lending, topstory

A recent survey of asset managers in securities lending showed that executives were interested in CCPs but lacked the information necessary to create a cost/benefit analysis and build their business…

Updates on netting, CCPs and the Leverage Ratio (Premium Content)

August 17, 2015

Basel III, CCP, Credit Exposure, Europe, Regulatory, US

Basel Committee, CCPs, Comprehensive Approach, Leverage Ratio, netting, PRA, Supplementary Leverage Ratio, topstory

One of our big themes for 2014 and 2015 has been netting rules: what they are now, how they are evolving, and how banks (and hence hedge funds, insurance companies,…

The ISDA 2015 Collateral Survey is out. Cash remains king.

August 12, 2015

Cleared Derivatives, ISDA Margin Survey, non-cleared derivatives, topstory

Basel III, CCP, Central Counterparties, Cleared Interest Rate Swaps, Derivatives, Dodd-Frank, Featured, OTC Derivatives Clearing, Regulatory

The 2015 ISDA Margin Survey was just released. It is always a treasure trove of information and this year is no exception. We take a look. Continue reading

Will Basel III rules mean that seclending and repo get swallowed up by OTC derivatives? (Premium Content)

August 11, 2015

Basel III, CCP, Derivatives, Repo, Securities Lending

Basel III, Comprehensive Approach, credit risk, SA-CCR, topstory

While the title of this article may sounds provocative, its actually a serious question. Recent Basel III rules on the Comprehensive Approach for securities lending credit risk analysis vs. the…

Fed Governor Jerome H. Powell spoke on the factors behind disappearing US Treasury liquidity. Its not just regulation.

August 4, 2015

Basel III, CCP, Central Counterparties, Featured, Federal Reserve, Regulatory, Repo, Uncategorized

Dark pools, High Frequency Trading, Jerome H. Powell, topstory, treasuries

Fed Governor Jerome H. Powell gave a speech on August 3rd at the Brookings Institution. The speech, called “Structure and Liquidity in Treasury Markets”, focused on what has been happening…

BNYM panel on the repo market: some interesting observations

July 29, 2015

Basel III, CCP, Central Counterparties, Collateral Management, Dodd-Frank, Featured, Federal Reserve, Regulatory, Repo

Bank of New York Mellon, BNYM, Repo, topstory

Recently Bank of New York Mellon (BNYM) published a review of a panel discussion “Securities Finance: Fixed Income & Repo Market Update”. We pick out a handful of interesting tidbits.…

New York Fed’s Liberty Street Economics: “Have Dealers’ Strategies in the GCF Repo© Market Changed?”

July 21, 2015

Basel III, CCP, Central Counterparties, Featured, Federal Reserve, Repo

Bank Holding Company, FICC, GCF Repo, topstory

The New York Fed’s Liberty Street Economics blog did a post on July 20th: “Have Dealers’ Strategies in the GCF Repo© Market Changed?”, written by Nina Boyarchenko, Thomas Eisenbach, and…

The Fed’s Senior Credit Officer Opinion Survey (SCOOS) on Dealer Financing Terms shows some hints of repo markets to come

July 8, 2015

repo balance sheet, SCOOS, Senior Credit Officer Opinion Survey on Financing Terms, topstory

CCP, Central Counterparties, Derivatives, Featured, Federal Reserve, Repo

The June 2015 Federal Reserve Senior Credit Officer Opinion Survey on Dealer Financing Terms (SCOOS) survey has been released. We take a look in a two-part post. Continue reading

Bloomberg article: “Who Will Save the Repo Market? Barclays Has a Few Ideas”. Some ideas might have been missed.

July 2, 2015

CCP, Central Counterparties, Featured, Federal Reserve, Money Market Funds, Prime Brokerage, Repo, Single Treasury Futures

FHLB, REIT, topstory

Tracy Alloway and Liz McCormick wrote an article in Bloomberg: “Who Will Save the Repo Market? Barclays Has a Few Ideas” (June 29th), describing a research piece by Barclay’s Joseph…

The Fed updates on Tri-Party Repo Reform. What is left to do: cross-clearer GCF and post-default fire sales.

June 25, 2015

GCF Repo, topstory, Tri-Party Repo Infrastructure Reform

CCP, Central Counterparties, Featured, Federal Reserve, Market infrastructure, Repo, Risk Management, Tri-Party Repo

The Fed released a statement “Update on Tri-Party Repo Infrastructure Reform Update on Tri-Party Repo Infrastructure Reform” (June 24, 2015). Can the Fed draw a line under the tri-party restructuring?…

What we learned at our Clearing and Market Infrastructure for Repo, Funding and Liquidity event (Premium Content)

June 15, 2015

CCP, Collateral Management, Liquidity Management, Market infrastructure, Repo

CCPs, collateral, Finadium, funding, Global Collateral Ltd, Liquidity, netting, Options Clearing Corp, Repo, topstory

Last week we held a panel and reception in New York City, “Clearing and Market Infrastructure for Repo, Funding and Liquidity,” co-sponsored by the Options Clearing Corporation and DTCC-Euroclear Global…

As fixed income liquidity dwindles, is it time to re-access repo haircut methodology?

June 10, 2015

corporate bond liquidity, Emerging Markets Fixed Income, topstory, UK Gilts

Basel III, CCP, Central Counterparties, Corporate Bonds, Derivatives, Dodd-Frank, Featured, Regulatory, Repo

A June 8th WSJ article “Bond-Market Volatility Triggers Alarms” by Christopher Wittall and Katy Burns on the prospect of a failed UK Gilt auction got us thinking about whether it…

What we know about cross-product, risk-based netting and CCPs (Premium Content)

June 4, 2015

CCP, Collateral Management, Derivatives, Featured, Investments, Prime Brokerage, Regulatory

CCPs, netting, risk-based capital, topstory

In our recently released research report, “Prime Brokerage: Towards a New Target Operating Model for Financing,” we presented a model on how banks could move client transactions off-balance sheet using…

Asset managers, sec lending, and shadow banking: regulators continue to try to connect the dots

June 3, 2015

CCP, Featured, Regulatory, Repo, SEC, Securities Lending, Shadow Banking, Trade Repositories

Blackrock, FSOC, Securities Lending, Shadow Banking, topstory

An article in the FT “US regulator gets tough on asset managers’ shadow banking” (May 24, 2015) by Chris Flood (sorry behind the pay wall) reminds us that regulators are…

Finadium: Prime Brokerage: Towards a New Target Operating Model for Financing

May 27, 2015

CCP, Collateral Management, Prime Brokerage, Securities Lending

collateral, financing, hedge funds, Margin, Prime Brokerage, Securities Lending, topstory

This Finadium report looks at a newly emerging conversation in prime brokerage on the Target Operating Model for financing. We evaluate the historical prime brokerage financing model in relation to…

Considerations on securities finance market evolution (Premium Content)

May 21, 2015

CCP, Collateral Management, Derivatives, Investments, Market infrastructure, Repo, Tri-Party Repo

DBV-X, Euroclear, innovation, Regulation, Repo, topstory, Tradition, tri-party data

We’ve had some thoughts this week about how securities finance markets are developing, including the prospects of more electronic trading and how to read available data. Here’s what we are…

Onboarding and Integration with the Lending CCP

May 21, 2015

CCP, Securities Lending, Technology

Eurex Clearing, Lending CCP, Pirum, Securities Lending, topstory

As banks, brokers and beneficial owners begin to get serious about signing on to Eurex Clearing’s Lending CCP, we evaluate what’s required to go live. We spoke with early participants…

Nomura exits swaps client clearing business. Who might be next?

May 18, 2015

CCP, Central Counterparties, Derivatives, Market infrastructure, OTC Derivatives Clearing

Cleared swaps, collateral management, NFA, OTC derivatives, Required Collateral on Cleared Derivatives, topstory

Last week Nomura announced they were exiting the swaps client clearing business in the US and EMEA. They join a list of other institutions that have also left – RBS, BNY…

OFR article on initial margin in centrally cleared swaps: do the CCPs really get it right?

May 13, 2015

Basel III, CCP, Central Counterparties, Cleared Interest Rate Swaps, Derivatives, Dodd-Frank, Featured, Market infrastructure, OTC Derivatives Clearing, Regulatory, Trade Repositories

CCP, OFR, OTC derivatives, Swaps, topstory

A recent article published by the Office of Financial Research, Hidden Illiquidity with Multiple Central Counterparties, May 7, 2015, by Paul Glasserman, Ciamac C. Moallemi and Kai Yuan caught our…

New BIS statistics on OTC derivatives

May 7, 2015

CCP, Central Counterparties, Derivatives, Featured

BIS, CCPs, OTC derivatives, topstory

Early this month the BIS released “Statistical Release, OTC derivatives statistics at end-December 2014” (April 2015). We take a look at some of the numbers.Continue reading

Finadium’s Big Ideas Quarterly Q2 2015 presentation is now online

May 7, 2015

CCP, Collateral Management, Securities Lending

Big Ideas Quarterly, Finadium, topstory

The Finadium Big Ideas Quarterly provides a summary of recent research, our upcoming report schedule and useful news. Continue reading

CME gets ready to add swaptions to central clearing. Not everyone is happy.

May 5, 2015

Basel III, CCP, Central Counterparties, CFTC, Cleared Interest Rate Swaps, Derivatives, Dodd-Frank, Featured

CME, LCH.Clearnet Swapsclear, swaptions, topstory