S&P’s Chessum in Pensions and Investments: ETPs more popular for securities lending and collateral

fter a surge in 2021, securities-lending revenue for ETPs has continued to climb, according to S&P Global Market Intelligence, even as headline flows have abated. Additionally, short-term Treasury exchange-traded funds are also being used as collateral in both the securities finance market and meeting margin requirements.

“The increasing interest-rate environment has provided numerous opportunities for borrowers, as both bond and equity prices have declined over the year,” said Matt Chessum, director, securities finance at S&P Global Market Intelligence in London.

“Sourcing either long or short exposure via ETFs through the securities finance markets is definitely a growing trend. On-loan balances, lending fees and lender revenues continue to grow year on year.”

The full article is available at https://www.pionline.com/exchange-traded-funds/etps-more-popular-securities-lending-and-collateral

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