SECURITIES LENDING & REPO MARKETS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - OCTOBER 2010

CONCLUSION

CONCLUSION

Securities lending and repo are complex markets where business expertise and the right capabilities are of paramount importance to succeed. Addition- ally, securities financing and liquidity management require a professional ap- proach and scale capabilities.

As we have seen, today market players have to face key challenges:

> Disparate regulations and heterogeneous tax frameworks among various jurisdictions, in the context of an increasing globalisation of the business;

> Operational complexity in terms of clearing and settlement for cross-border transactions due to the fragmentation of infrastructures and the lack of automation, but also in terms of collateral management, corporate actions and income collection processing, etc.;

> Need for highly sophisticated collateral management and risk management infrastructure.

They also have to adapt to an evolving environment, with new regulations and requirements.

Yet, it would be a shame not to seize the great opportunities offered by the securities lending and repo markets, in particular the opportunity to gener- ate value in a risk-controlled environment and enhance portfolios perform- ance by activating inactive capital. Now more than ever, appointing a service provider, whether acting as agent lender or principal borrower and equipped with integrated front-to-end capa- bilities, is highly recommended. However, not all service providers are alike. You need a proven player with specialised market knowledge and efficient infrastructure, that under- stands its clients’ business, who is focused on the safety of their assets and on achieving optimal risk-adjusted returns and last but not least, who is flexible enough to set up a program which meets their unique and evolv- ing requirements.

Securities Lending & Repo markets | page 59