The business of agency securities lending has spent the last decade retooling itself for new regulations, technology and regulatory reporting. Agents have largely succeeded in weathering these storms and generating profitable outcomes. Now however, challenges are coming into view that suggest a further realignment of agent lenders and their clients. If Basel III was Act I, the changes ahead will be Act II then a well-deserved intermission.
This report considers external financial services industry trends that are affecting the agency lending business. From no-fee fund products to Single Counterparty Credit Limits to bank-wide reorganizations, agents will need to develop robust strategies to respond and get ahead of the pack. Agent lenders already know the big-ticket items, for example reporting for the Securities Finance Transactions Regulation (SFTR) and future regional variations, but changes set to impact the industry go further and deeper than data management. Clients of agent lenders have their own decisions to make as well, including assessing their ideal engagement level in business activities.
This report should be read by agent lenders, asset holders and asset managers in lending programs, and their service providers.
Table of Contents
- Executive Summary
- The State of Agency Lending
- – Revenues and Competition
- Factors Impacting Business Evolution
- – Technology Gains
- – Who Is Borrowing
- – Securities
- – Client Directions
- – The Wild Card
- Leaders, Followers and Disrupters
- – How Many Agents Does the Market Need?
- About the Authors
- About Finadium LLC