A technical change in the US Basel III Endgame Notice of Proposed Rulemaking (NPR) sort of looks to benefit securities finance over Total Return Swaps (TRS) on bank balance sheets, at least in certain circumstances that tend to arise on a regular basis on trading desks. This says nothing about the long list of exemptions also provided in the NPR. But whether intentional or not, this change could result in more business flowing back towards physical financing and away from TRS, reversing a multi-year long trend.
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