SECURITIES LENDING Trends & Developments Guru Raghavan.
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Transcript of SECURITIES LENDING Trends & Developments Guru Raghavan.
![Page 1: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/1.jpg)
SECURITIES LENDINGTrends & Developments
Guru Raghavan
![Page 2: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/2.jpg)
Index
• Needs of the market place• Requirements for cross border mobilisation• Current constraints• Possible solutions
![Page 3: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/3.jpg)
Market needs..
• Increased demand for secured lending • Renewed focus on counterparty credit risk
management• Infrastructure that recognizes four dimensions in
securities lending: custody, settlement, borrowing/lending, tri-party
• Demand for process automation and innovation in securities lending
• Demand for increased netting to minimize any unnecessary settlement
![Page 4: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/4.jpg)
Market needs..
• Demand for increased opportunities in balance sheet netting
• An environment where bonds can move freely and without friction between settlement systems
• Infrastructure that supports fluid upstream and downstream movement of securities
• Demand for cash led standardization • A trading environment where cash investment is not
driven or influenced by settlement considerations
![Page 5: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/5.jpg)
Requirements for cross border mobilization
•Fragmentation of collateral liquidity pools
•Operating hours (time-differences and cut-off time)
•Legal and fiscal barriers •Proliferation of different legal documentation
•Different fiscal reporting requirements
•Lack of complete set of information
•Lack of harmonization of relevant market practices
![Page 6: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/6.jpg)
Current constraints•Fragmentation of collateral liquidity pools
•Operating hours (time-differences and cut-off time)
•Legal and fiscal barriers
•Proliferation of different legal documentation
•Different fiscal reporting requirements
•Lack of complete set of information
•Lack of harmonization of relevant market practices
![Page 7: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/7.jpg)
Possible solutions
• Netting (Vertical and Daily netting of all outstanding positions)
• Pooling• Optimization• Reporting• Settlement through auto allocation mechanisms
![Page 8: SECURITIES LENDING Trends & Developments Guru Raghavan.](https://reader036.fdocuments.net/reader036/viewer/2022082612/56649f2c5503460f94c47d60/html5/thumbnails/8.jpg)