The transformation of securities lending
“Greater emphasis today is placed on helping financial institutions meet the new collateral requirements”
Reports of the death of securities lending have been greatly exaggerated. The product has transformed significantly over the years, of course.
Greater emphasis today is placed on helping financial institutions meet the new collateral requirements being imposed upon the industry by the Dodd-Frank and EMIR regulatory frameworks.
The watchword in this new era is collateral transformation rather than securities lending. But collateral transformation is securities lending.
SGSS clients continue to need the product, whatever its name. Indeed, demand is growing, and changing, and SGSS continues to develop its service to meet client needs. “We have had many requests for third-party agency lending in recent years,” says Anne-France Demarolle, Global Head of Liquidity Management at SGSS. “We put a lot of thought into analysing demand and supply in the market, and have enhanced our capacity to lend a customer's securities, whether equities or fixed income, even if they are not under our custody.”
“This enables those who manage their own custody inhouse to access securities lending at a variable cost rather than incur the fixed cost of establishing a dedicated securities lending team and infrastructure, boosting their overall return profile,” she continues. “As the need for quality collateral increases, the value of our service in terms of making assets work will become ever more apparent.”
- Securities lending transforming not dying
- Heightened collateral demand to boost securities lending
- SGSS adapts to better match demand/supply