News and Notes

asset managers, automation, CloudMargin, collateral management, collateral optimization, Prudential

CloudMargin announced that PPM America, a subsidiary of UK-based Prudential, has gone live on its platform. The investment manager has some $120 billion AuM, which includes $9.31 billion managed by…

CanDeal partners with six Canadian Banks to Create Market Data Hub

February 13, 2019

Canada, CanDeal, derivatives

The six largest Canadian banks have partnered with CanDeal to create the country’s first comprehensive fixed income and derivatives market data hub. The Data-as-a-Service (DaaS) business, DataVault Innovations, intends to…

CNBC: Fidelity and Schwab cut trading commissions on more ETF

February 13, 2019

ETFs, fidelity, Schwab

The price war between major U.S. brokerages heated up Tuesday after Charles Schwab and Fidelity both announced they would expand commission-free trading to hundreds more exchange-traded funds. Both companies said…

US Office of Financial Research to collect CCP repo transactions

February 12, 2019

GCF Repo, OFR, Repo

The U.S. Office of Financial Research adopted a final rule today to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market. The daily…

BIS Working Paper: Central counterparty capitalization and misaligned incentives

February 12, 2019

BIS, capitalization, CCPs, skin in the game

Wenqian Huang 11 February 2019 PDF full text This paper investigates for-profit central counterparties (CCPs), asking whether their incentives might undermine financial stability. Such CCPs choose how much capital to…

FSB work plan for 2019 focuses on wrapping up loose ends

February 12, 2019

Financial Stability Board, FSB

FSB work programme for 2019 This work programme details the FSB’s planned work and an indicative timetable of main publications for 2019. It reflects the FSB’s continued pivot from policy…

Indonesia prepares new Securities Finance Agency to provide financing

February 12, 2019

ABNR, Indonesia, securities finance

The Financial Services Authority (“OJK”) has issued a regulation that provides a detailed framework for the establishment of a dedicated Securities Finance Agency (Lembaga Pendanaan Efek / “SFA”) so as…

Eurex clears first swap transaction for U.S. end clients

February 11, 2019

Eurex, OTC derivatives, US

Eurex Clearing, one of the world’s leading central counterparties (CCP), has cleared its first swap transaction for end clients domiciled in the U.S. Citi is the first futures commission merchant…

Fed blog on the dominance of the US Dollar as a reserve currency

February 11, 2019

Federal Reserve Bank of New York, Liberty Street Economics, reserve currency, US dollar

The U.S. Dollar’s Global Roles: Where Do Things Stand? Liberty Street Economics Linda S. Goldberg and Robert Lerman Previous Liberty Street Economics analysis and New York Fed research addressed the…

Fed’s Randal Quarles: next steps for the Financial Stability Board

February 10, 2019

Federal Reserve, FSB, Quarles

News and Notes, News and Notes – Fintech

Ideas of Order: Charting a Course for the Financial Stability Board Vice Chairman for Supervision Randal K. Quarles At Bank for International Settlements Special Governors Meeting, Hong Kong February 10,…

Get the weekly SFM update – our February 8 newsletter is online

February 8, 2019

Headlines: Finadium Big Ideas Quarterly Q1 2019 now online; DFAST and CCAR scenarios for 2019: what’s the worst that could happen?; Comments on whether the US NSFR will be a…

Deutsche Bank will use CloudMargin’s public cloud for collateral infrastructure

February 7, 2019

Anna Reitman

cloud technology, CloudMargin, Collateral Management IT, Deutsche Bank, Margin

According to a joint statement, CloudMargin’s platform will be integrated into Deutsche Bank’s collateral infrastructure. The move is expected to save on costs and improve the client experience by creating…

MTS sees record trading on its repo markets in January 2019

February 7, 2019

MTS, Repo

MTS Repo sees highest ever trading day on 21 January 2019 January was a record month for repo market activity on MTS MTS, the electronic trading platform that is part…

Tradeweb reports new post-crisis high in repo trading of over $170 billion daily for January 2019

February 6, 2019

Trading activity set a new record in January 2019 following the previous high set in December 2018. Average daily volume (ADV) for Tradeweb Markets of $624.5 billion (bn) across rates,…

NY Fed proposes change to the Overnight Bank Funding Rate

February 5, 2019

Federal Reserve, OBFR

As the administrator of the Overnight Bank Funding Rate (OBFR), the New York Fed is proposing a change in the composition of the rate, and is providing details of this…

BCBS: An examination of initial experience with the global systemically important bank framework

February 5, 2019

BCBS, BIS, G-SIBs

This paper presents a first analysis of the experience to date with the global systemically important bank (G-SIB) framework, the methodology for assessing the systemic importance of G-SIBs. Several issues…

ECB finds €10.9 trillion in Euro HQLA but potential for pockets of HQLA scarcity

February 5, 2019

ECB, HQLA

Availability of high-quality liquid assets and monetary policy operations: an analysis for the euro area Occasional Paper Series No 218 / February 2019 Roel Grandia, Petra Hänling, Michelina Lo Russo, Pontus…

FSB publishes Global Monitoring Report on Non-Bank Financial Intermediation 2018

February 4, 2019

FSB, Non-Bank financial intermediation

The Financial Stability Board (FSB) today published the Global Monitoring Report on Non-Bank Financial Intermediation 2018. The report presents the results of the FSB’s eighth annual monitoring exercise that assesses…

EquiLend Partners With Stonewain to Offer Fully Integrated Securities Finance Platform

February 4, 2019

EquiLend has partnered with Stonewain to offer securities finance market participants around the globe the ability to manage their book of business on a single, comprehensive and integrated platform. The…

ECB working paper: From cash- to securities-driven euro area repo markets: the role of financial stress and safe asset scarcity

February 2, 2019

ECB, Repo

Claus Brand, Lorenzo Ferrante, Antoine Hubert No 2232 / January 2019 Focussing on repo specialness premia, using ISIN-specific transaction-by-transaction data of one-day maturity repos, we document a gradual shift from…

OCC seclending CCP down 1.5% in Jan 2019 year over year

February 1, 2019

OCC, Options Clearing Corp, Securities Lending

OCC’s securities lending CCP activity was down 1.5 percent in new loans from January 2018 with 114,940 transactions last month. The average daily loan value at OCC in January 2019…

BofE Working Paper: To ask or not to ask: collateral vs screening in lending relationships

February 1, 2019

Bank of England, collateral

We study the impact of higher capital requirements on banks’ decisions to grant collateralized rather than uncollateralized loans. We exploit the 2011 EBA capital exercise, a quasi-natural experiment that required…

NY Fed: notes from the Fourth Annual Conference on the Evolving Structure of the U.S. Treasury Market

February 1, 2019

Federal Reserve, US Treasuries

The New York Fed recently hosted the fourth annual Conference on the Evolving Structure of the U.S. Treasury Market. The one-day event was co-sponsored with the U.S. Department of the…

Get the weekly SFM update – our February 1 newsletter is online

February 1, 2019

Headlines: Bloomberg dips its toe into securities lending and repo trading (Premium); Review: RMA and EquiLend’s LatAm guide; US repo has become a good deal for cash investors; Analysis of…

ARRC addresses volatility of SOFR

January 31, 2019

ARRC, SOFR

Contracts referencing SOFR are usually based on an average of daily interest rates over a given period of time. These averages of SOFR are quite smooth and can be easily…

RepoClear hits €197 trn in 2018 volume, up 13% from 2017

January 31, 2019

ECB’s Yves Mersch: The possible triangle – frictionless movement of payments, securities and collateral across Europe

January 31, 2019

collateral, ECB, ICMA

Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the 2019 Annual General Meeting of the International Capital Markets Association’s European Repo and…

ECB publishes results of Dec 2018 SESFOD

January 31, 2019

ECB, SESFOD

Results of the December 2018 SESFOD Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets Credit terms tightened for all counterparts, but non-price terms offered…

LSEG to acquire 4.92% of Euroclear Holding SA/NV

January 30, 2019

London Stock Exchange Group plc (“LSEG”) announces it will acquire an aggregate 4.92% stake in Euroclear’s share capital for €278.5 million (£241.9 million). Euroclear is a leading financial market infrastructure…

ESMA updates CSDR, benchmark Q&As

January 30, 2019

Benchmark Regulation, CSDR, ESMA

Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR): The updated Q&As provide answers to questions regarding practical issues on the implementation of the new…

Shanghai Stock Exchange Releases Notice On Collateralized Repo Of Shares

January 30, 2019

collateral, equity repo, Shanghai Stock Exchange

To implement relevant requirements on preventing and defusing the shares collateral risks of listed companies given by the Financial Stability and Development Committee under the State Council and encourage and…

Pirum extends North American offering with US Domestic Tri-party connectivity

January 29, 2019

Pirum, tri-party, US

Securities Finance Automation leaders Pirum, have recently globalized their tri-party connectivity service. Building on its existing real time connectivity to the 4 international tri-party agents, it is now able to…

RMA and EquiLend publish Latin America Securities Finance User Guide 2019

January 29, 2019

Equilend, Latin America, RMA

EquiLend and RMA have joined forces with domestic and international market participants active in Latin America to produce the first-annual Latin America Securities Finance User Guide, the most robust document of…

FCA encourages prompt action on LIBOR fallback plans

January 29, 2019

FCA, LIBOR

LIBOR transition and contractual fallbacks Speech by Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA, delivered at the International Swaps and Derivatives Association (ISDA) Annual Legal…

HQLAx reports six banks onboarding to use blockchain collateral platform

January 29, 2019

collateral management, Deutsche Borse, HQLAx

Six banks already started onboarding Deutsche Börse acquired further shares in HQLAx The development of the HQLAx target operating model, an innovative blockchain solution for collateral swaps in the securities…

ICE proposes USD unsecured bank debt indices

January 25, 2019

ICE, US ICE Bank Yield Index

Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration (“IBA”) has published a…

Get the weekly SFM update – our January 25 newsletter is online

January 25, 2019

Headlines: Review of the second annual Asian Prime Collateral Forum; UC Berkeley and the Chicago Fed on securities finance conditions, asset prices and liquidity; Finadium: European Delta One Trader Survey;…

BIS: Risk endogeneity at the lender/investor-of-last-resort

January 25, 2019

BIS, Central Banks, risk management

We address to what extent a central bank can de-risk its balance sheet by unconventional monetary policy operations. To that end, we propose a novel risk measurement framework to empirically…

ISDA Publishes Best Practice Recommendations for CCPs

January 24, 2019

CCPs, ISDA, risk management

The International Swaps and Derivatives Association, Inc. (ISDA) has published a set of best practices for central counterparties (CCPs), aimed at ensuring greater consistency in risk practices at CCPs across…

BofE: Look abroad! Global financial conditions and risks to domestic growth

January 24, 2019

Bank of England, Bank Underground, risk management

A new post on Bank Underground Fernando Eguren-Martin and Andrej Sokol What’s the relationship between financial conditions and risks to growth in an economy? And, in a world of highly…

BIS: Establishing viable capital markets

January 23, 2019

BIS, Committee on the Global Financial System

Report submitted by a Working Group established by the Committee on the Global Financial System The Group was chaired by Viral V Acharya (Reserve Bank of India) and Li Bo…

St. Louis Fed: Should the central bank issue e-money?

January 22, 2019

Currency Bank Digital Currency, e-money, St. Louis Fed

Should a central bank take over the provision of e-money, a circulable electronic liability? We discuss how e-money technology changes the tradeoff between public and private provision, and the tradeoff…

WSJ: Dollar maintains role as dominant reserve currency

January 22, 2019

dollar, Euro, reserve currency, RMB, WSJ

Beijing and Moscow have rarely had more reasons to rue the dollar’s global dominance. Yet changing the status quo will be difficult, and recent efforts to do so have yielded…

Benzinga and Tidal Markets announce launch of a securities lending volatility indicator

January 20, 2019

Benzinga, Securities Lending, Tidal Markets

Benzinga announced today that it will be teaming up with Tidal Markets, a volatility data provider, to deliver the Securities Lending Volatility Indicator (SLVX). This new product forecasts market volatility…

Bank of England SecLending Committee considers market impact of CSDR

January 20, 2019

Bank of England, CSDR, Securities Lending

Minutes Securities Lending Committee 20 November 2018 The FCA provided some background and update on the current position with regard to the introduction of CSDR. ICMA presented to the Committee…

Basel Committee completes review of Principles for sound liquidity risk management and supervision

January 19, 2019

Basel Committee, Liquidity

The Basel Committee on Banking Supervision has completed a review of its 2008 Principles for sound liquidity risk management and supervision. The review confirmed that the Sound Principles remain fit…

BofE Securities Lending Committee discussion on technology – September 2018

January 19, 2019

News and Notes, News and Notes – Fintech

Bank of England, HQLAx, Securities Lending, technology, TradingApps, Wematch

Minutes Securities Lending Committee 24 September 2018 2. Presentation from HQLAX The intention of HQLAX is to remove the need for settlement of the collateral itself in a transaction. HQLAX…

World Federation of Exchanges responses to Basel Committee’s Leverage Ratio Consultation

January 18, 2019

Basel Committee, client clearing, Leverage Ratio, SA-CCR, WFE

The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has published its response to the Basel Committee on Banking Supervision’sconsultation on the leverage ratio treatment…

IHS Markit and AcadiaSoft to Deliver Integrated Solution Suite for Initial Margin Management

January 18, 2019

AcadiaSoft, IHS Markit, Initial Margin