News and Notes

CSDs, Global Custodian, SRD II

The EU’s Shareholder Rights Directive II (SRD II) could be an excellent opportunity for intermediary businesses – chiefly issuer central securities depositories (CSDs) – to augment their STP (straight-through-processing) capabilities.…

Bloomberg: Fidelity brings securities lending in-house

May 15, 2019

Anna Reitman

fidelity, Goldman Sachs, Securities Lending

Fidelity Investments is cutting out its middleman, Goldman Sachs, when dealing with Wall Street short sellers. The money manager is bringing its stock-lending business in-house, according to a March 29…

BoE blog: is new banking regulation affecting derivatives clearing?

May 14, 2019

Anna Reitman

Bank of England, bank regulation, derivatives clearing

Just like the beginning of an unforeseen family argument, two key tenets of the post-crisis reforms have unexpectedly started to butt heads: the leverage ratio capital requirement and the mandatory requirement to centrally…

Get the weekly SFM update – our May 10 newsletter is online

May 10, 2019

Headlines: Getting it right on delegated reporting in SFTR; Should US repo be priced off of OBFR, SOFR or IOER? (Premium); Finadium Big Ideas Quarterly Q2 2019 now online; SFM…

Bank of England blog: Currency Mispricing and Dealer Balance Sheets

May 9, 2019

Bank of England, currency swaps

Deviations from covered interest parity (CIP) represent an arbitrage opportunity, at least in theory. In a new paper, we show that post-crisis financial regulation may explain why this mispricing persists…

Basel Committee reports global progress on Basel III but limited NSFR adoption

May 8, 2019

Basel Committee, Basel III

The Basel Committee on Banking Supervision today issued the Sixteenth progress report on adoption of the Basel regulatory framework. As noted by the Group of Central Bank Governors and Heads…

ISLA launches new website

May 8, 2019

ISLA, Securities Lending

The International Securities Lending Association (ISLA), a leading industry trade association representing the common interests of securities lending and financing market participants across EMEA, is proud to announce the launch…

BNY Mellon and AcadiaSoft partner for non-cleared margin calculations outsourcing

May 7, 2019

AcadiaSoft, BNY Mellon, non-cleared margin

Buy-side derivatives market participants are now able to fully outsource their entire non-cleared margin workflow, via the market’s first end-to-end collateral solution developed by BNY Mellon. Going forward, clients can…

Standard Chartered Bank and eSecLending Partner to Provide Agency Securities Lending

May 7, 2019

eSecLending, Standard Chartered

Standard Chartered has entered into a partnership with eSecLending, the specialist independent securities lending agent, to provide agency securities lending to its global institutional investor clients on both a custody…

Bursa Malaysia launches POC for securities lending on blockchain

May 6, 2019

blockchain, Bursa Malaysia, Securities Lending

Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) embarks on a securities borrowing and lending (“SBL”) Proof-of-Concept (“POC”) – a first of its kind in the ASEAN, that explores the…

Fed blog: Selected Deposits and the OBFR

May 6, 2019

Liberty Street Economics, OBFR, Selected Deposits

The Federal Reserve Bank of New York recently decided to revise the composition of the Overnight Bank Funding Rate (OBFR), a reference rate measuring the cost banks face to borrow…

ESRB working paper: Has regulatory capital made banks safer? Skin in the game vs moral hazard

May 6, 2019

ESRB, macroprudential regulation

Working Paper Series No 91 / May 2019 Ernest Dautović The paper evaluates the impact of macroprudential capital regulation on bank capital, risk taking behaviour, and solvency. The identification relies…

BIS: OTC derivatives notional declines to $544 trillion, market value down to $9.7 trillion

May 5, 2019

Notional amounts of OTC derivatives declined from end-June to end-December 2018, from $595 trillion to $544 trillion. The market value of OTC derivatives fell from $10.3 trillion to $9.7 trillion,…

Eurex Repo up 30.2% in April 2019 volumes year over year

May 5, 2019

Mondo Visione: Eurex Repo, the leading provider for international financing in the secured money market business (repo and securities lending), saw an overall increase of 30.2 percent in average outstanding…

Federal Reserve Board invites comment on a proposal to apply netting protections to a broader range of financial institutions

May 3, 2019

Federal Reserve, netting

The Federal Reserve Board on Friday requested comment on a proposal to reduce risk and increase efficiency in the financial system by applying netting protections to a broader range of…

BofE working paper finds (again) that Leverage Ratio damages repo market resilience

May 3, 2019

Bank of England, Leverage Ratio, Repo

Decomposing changes in the functioning of the sterling repo market Joseph Noss and Rupal Patel We identify the degree to which changes in gilt repo market functioning have been driven…

Get the weekly SFM update – our May 3 newsletter is online

May 3, 2019

Headlines: Mastering the Client Side of SFTR; Smaller clients, new opportunities in securities finance should be pursued; Does the European pledge model solve all ills? (Premium); Differentiate your technology platform…

FSB designates DSB as Unique Product Identifier (UPI) Service Provider

May 2, 2019

DSB, FSB, UPIs

At its meeting on 26 April in New York, the FSB designated The Derivatives Service Bureau (DSB) Ltd (DSB) as the service provider for the future UPI system. This is…

Broadridge acquires Rockall

May 2, 2019

NEW YORK, N.Y. – May 1, 2019 – Broadridge Financial Solutions, Inc. (NYSE:BR), a global Fintech leader and part of the S&P 500® Index, today announced that it has acquired…

OCC seclending CCP volumes down 1.6% in April 2019 year over year

May 2, 2019

OCC, Securities Lending

OCC’s securities lending CCP activity was down 1.6 percent in new loans from April 2018 with 109,141 transactions last month. Year-to-date stock loan activity decreased 2.3 percent from 2018 with…

CFTC Staff Issues Clearinghouse Supervisory Stress Test Report

May 1, 2019

CCPs, CFTC, CME, LCH

The Commodity Futures Trading Commission’s (CFTC) Division of Clearing and Risk (DCR) and the Office of the Chief Economist (OCE) today issued, CCP Supervisory Stress Tests: Reverse Stress Test and…

Hazeltree launches Securities Finance™ Version 7 for best ex in financing rates and portfolio attribution

April 30, 2019

News and Notes, News and Notes – Fintech

HazelTree, securities finance

New York, London and Hong Kong, April 30, 2019– Hazeltree, the leading provider of integrated buy-side treasury management solutions, today announced the release of Hazeltree Securities Finance™ Version 7, a…

FSB publishes peer review on bank resolution planning

April 29, 2019

bank resolution, FSB, Living Wills

The Financial Stability Board (FSB) published today a Thematic Review on Bank Resolution Planning. This report forms part of a series of peer reviews to support timely and consistent implementation…

The Trade: Credit Suisse sees increased prime brokerage revenues after balance sheet cuts

April 29, 2019

Credit Suisse, Prime Brokerage

Credit Suisse has seen a turnaround in its prime brokerage unit after 18 months of cutting back non-profitable hedge fund clients and staff. The Swiss-based bank stated it has seen…

BofE working paper: Mapping bank securities across euro area sectors: comparing funding and exposure networks

April 26, 2019

Bank of England, funding

We present new evidence on the structure of euro area securities markets using a multilayer network approach. Layers are broken down by key instruments and maturities as well as the…

Fed discussion paper: Liquidity Funding Shocks: The Role of Banks’ Funding Mix

April 26, 2019

Europe, Federal Reserve, liquidity shocks

This study attempts to evaluate the impact of an increase in banks’ funding stress and its transmission to the real economy, taking into account different funding sources banks can rely…

Get the weekly SFM update – our April 26 newsletter is online

April 26, 2019

Headlines: In five years, 90% of funding will be done by machines; Finadium: Total Return Futures, Total Return Swaps and the Repo Market; Korea lets a blockchain seclending platform into…

ARRC Releases Recommended Fallback Language for Floating Rate Notes and Syndicated Loans

April 25, 2019

ARRC, SOFR

The Alternative Reference Rates Committee (ARRC) today released recommended contractual fallback language for U.S. dollar LIBOR denominated floating rate notes and syndicated loans. These provisions are for market participants’ voluntary…

INTL FCStone Financial Launches Prime Brokerage Division

April 25, 2019

INTL FC Stone, Prime Brokerage

NEW YORK, April 23, 2019 /PRNewswire/ — INTL FCStone Inc. (NASDAQ: INTL) today announced that its subsidiary, INTL FCStone Financial (“INTL” or “the Company”), has launched a prime brokerage division,…

Murex Launches New LIBOR Reforms Solution

April 24, 2019

LIBOR, Murex

Murex, a global leader in trading, risk management and processing solutions, has launched a new offering addressing the challenges of LIBOR discontinuation and benchmark reforms. It is also collaborating with…

ARRC Releases a User’s Guide to SOFR

April 22, 2019

ARRC, SOFR

The Alternative Reference Rates Committee (ARRC) today released a white paper to help explain how market participants can use its recommended alternative to U.S. dollar LIBOR, the Secured Overnight Financing…

Get the weekly SFM update – our April 19 newsletter is online

April 19, 2019

Headlines: Canadian banks in the global prime brokerage market; Three ways to read the ENSO Data Insights launch (Premium); For SFTs, is there information value in RTS 28 reports? (Premium);…

CACEIS/Credit Agricole and Santander to merge asset servicing operations

April 18, 2019

CACEIS, Credit Agricole, Custody, Santander

Crédit Agricole S.A. and Santander sign a Memorandum of Understanding to join forces and create a major global player in custody and asset servicing Crédit Agricole S.A. and Santander enter…

BGC Brokers’ Capitalab launches inaugural multi-Central Clearing Counterparty Initial Margin Optimisation service

April 18, 2019

BGC Partners, Capitalab

Capitalab, a division of BGC Brokers LP, an entity within the BGC Partners, Inc. (NASDAQ: BGCP) group of companies, today announced the execution of Capitalab’s first Rates Initial Margin (IM)…

CME Group Launches ENSO Data Insights to Aid Best Execution Financing for Hedge Funds

April 16, 2019

CME, Enso, securities finance data

LONDON and NEW YORK, April 16, 2019 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it has launched ENSO Data Insights, a community benchmarking tool…

NN: How ESG principles can make a difference in securities lending

April 15, 2019

ESG, NN, Securities Lending

The incorporation of sustainability principles in securities lending programs has accelerated in recent years, as more stringent requirements in terms of regulation and transparency have led to a significant increase…

Tradeweb hits post-crisis record volume in repo trading

April 11, 2019

Tradeweb Posts Record Trading Volumes as Global Bond Yields Plummet ADV in repurchase agreements of $177.7 bn in March set a post-crisis record on further growth in bilateral electronic trading…

Delta One, LLC and Dynamex Trading, LLC launch equity finance marketplace

April 11, 2019

Delta One, Dynamex, equity finance

NEW YORK, April 10, 2019 /PRNewswire/ — Delta One, LLC and Dynamex Trading, LLC are pleased to announce the upcoming launch of Delta One, a fully transparent, liquid, and actionable equity…

ISLA Publish 2019 Legal Opinions for the Global Master Securities Lending Agreement (GMSLA)

April 10, 2019

GMSLA, ISLA

The International Securities Lending Association (ISLA) has published the 2019 updates to the legal netting opinions which support the Global Master Securities Lending Agreement (GMSLA) for the securities lending industry. Updates have been obtained only for…

ISDA 2019 Margin Survey: Top 20 Firms Collected Nearly $160 Billion in Initial Margin at Year-End 2018

April 10, 2019

HONG KONG, April 10, 2019 – The International Swaps and Derivatives Association, Inc. (ISDA) has published its latest margin survey, which shows the amount of initial margin (IM) collected by…

World Federation of Exchanges says 2018 derivatives volumes exceeded 30 billion contracts

April 10, 2019

derivatives, IOMA, World Federation of Exchanges

THE WORLD FEDERATION OF EXCHANGES PUBLISHES ANNUAL IOMA DERIVATIVES REPORT Volume of derivatives contracts traded exceeds 30 billion London, Wednesday 10 April 2019 – The World Federation of Exchanges (“WFE”), the…

DTCC partners with Droit for reporting eligibility services to Trade Repository

April 9, 2019

Droit, DTCC, SFTR

ISDA AGM, Hong Kong, China, April 8, 2019 – The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that…

ISDA Asia derivatives survey cites the importance of close-out netting

April 9, 2019

Asia, close-out netting, derivatives, ISDA

Nearly three quarters of survey respondents expect the proportion of foreign exchange derivatives trading executed in Asia ex-Japan to increase over the next three to five years, while 63% predict…

Basel Committee issues a consolidated version of its standards

April 9, 2019

Basel Committee, Basel III

Today the Basel Committee on Banking Supervision launched a new section of its website that sets out a consolidated version of its global standards for the regulation and supervision of banks.…

SGX launches Total Return Futures on the Nikkei 225

April 8, 2019

SGX, Total Return Futures

News and Notes, News and Notes – Fintech

Innovative listed derivatives, based on Nikkei 225 implied equity repo, offers risk-management solution that addresses Asia’s largest securities financing market SGX futurises another class of OTC derivatives to help clients…

BIS research: bigtech and the changing structure of financial intermediation

April 8, 2019

Anna Reitman

Bank for International Settlements, bigtech, credit, data analysis, fintech, machine learning, Mercado Libre

In a BIS working paper, researchers from the Financial Stability Board, Bank for International Settlements, Graduate Institute (Geneva) and Argentina’s bigtech firm Mercado Libre consider the drivers and implications of…

NYT article on fund pricing, negative fees and securities lending

April 8, 2019

fidelity, mutual funds, negative fees, New York Times, Securities Lending, Vanguard

A Price War Has Driven Fund Fees to Zero. They May Be Set to Drop Further. Investment fees have dropped so low that you may have assumed they have gone…

MarketAxess and Virtu Financial partner on global ETF and Fixed Income trading

April 8, 2019

ETFs, MarketAxess, Virtue Financial

NEW YORK, April 04, 2019 (GLOBE NEWSWIRE) — Virtu Financial, Inc. (NASDAQ:VIRT) and MarketAxess Holdings, Inc. (NASDAQ: MKTX), two global leaders in electronic trading, today announced a partnership to provide…

Fidelity Investments adds affiliate National Financial Services as agent lender

April 6, 2019

fidelity, Securities Lending