Securities Financing Industry News | SFTS: access to liquidity continues to strengthen in financial securities markets


Liquidity is still strong in the securities finance market and the ability to access liquidity through multiple channels remains of critical importance, according to a panelist at the Securities Finance Technology Symposium.

During the Challenge of Improving the Liquidity Chain panel, four panelists discussed the current state of the liquidity landscape.

Panelists included Staffan Ahlner, head of Collateral +, senior vice president of State Street;
Grant Davies, EMEA Sales Manager at EquiLend; BJ Marcoullier, sales and business development manager at Transcend Street Solutions; and David Raccat, CEO of Wematch. Securities Funding.

Led by Gabriele Frediani, management consultant at ZBO International, the panel notes that the liquidity space is less intimidating with the influx of technologies and solutions.

One panelist said: “We want to encourage liquidity, whether it is expressed through securities borrowing and lending (SBL), repo or Total Return Swaps (TRS).

“The key is to manage these processes efficiently while minimizing latency, ensuring that you are able to manage your post-trade connectivity so that if you trade, the trade settles.”

He goes on to say, by streamlining access to liquidity and reducing friction constraints, it means that it is easier and more profitable for clients to enter this market and access that liquidity. He returned to his main point by stating, “If this is a recorded transaction, you need to find liquidity, you need to be able to settle the transaction and you need to make it the reg reporting component as well. It’s supposed to be complex, but we can break it down, we can make it easy for people to access, and that means we can activate the market.

Moving the agenda forward, the discussion revolved around whether liquidity had become more available and accessible over time.

In response to this, a panelist said that liquidity for them continues to grow for their market. There are hidden stocks that “sit on the sidelines”, but there is a lot of liquidity. As central banks begin to unwind their asset purchase programs, this will have a huge effect on the market. There are more attendees to come, which is welcome as “liquidity diversity is incredibly important”.

Reinforcing this point, another states, “We have seen improvements in liquidity, whether you think of liquidity in terms of reducing the use of unsecured funding or seeing liquidity as reducing buffers for flows. intraday. Everyone is striving to improve their efficiency and controls. Liquidity is the fat that allows our clients to take more risk, to respond to market conditions.

Concluding this last point, a third panelist notes that the market works extremely efficiently. There are capital constraints that make some transactions unprofitable, but overall there is definitely liquidity in the market.

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