Outlook for 2023 

The 2023 EU Beneficial Owners’ Roundtable was moderated by Andy Dyson, the Chief Executive of ISLA with EquiLend as the lead sponsor. The roundtable was held in late March with a panel of industry experts discussing topics from the data, ESG, collateral and the change from 2022 to 2023.

A portion of the 2023 EU Beneficial Owners Roundtable is available in the video above. See below for a transcript of the highlights. 

Andy Dyson, Chief Executive Officer, ISLA: Can I just get your closing thoughts on what you expect the market to look like as we go into the remainder of this year or any other closing thoughts.

Nick Davis, Executive Director, EMEA Head of Relationship Management, J.P. Morgan: Continue to support funding requirements for our clients which will enhance asset optimisation, taking additional risk through non indemnified style trades, accessibility to other liquidity sources, and continued efficiency both at the front end and operationally.

Olivier Zemb, Head of Equity Finance and Collateral Trading, Caceis Bank: As a whole, I think we need greater harmonisation together with tailor-made solutions for clients. For trading, govies will be a major element this year, like previous years, but I don’t think we have seen the ‘flight to quality effect’ yet, even if the markets are quite jittery. Repo markets are not moving a lot in terms of spreads between peripheral and core govies.

Maurice Leo, Client Solutions, Agency Securities Lending, Deutsche Bank: Focus on the [US] debt ceiling, unfortunately, it’s going to be there in the second half of the year. There’s no getting away from that – we have had dress rehearsals before so we’ll deal with that.

Ernst Dolce, CEO & Co-Founder, Biben Capital Markets: I expect an increase in liquidity solutions and a shift in the debate from securities financing/ collateral management to liquidity solutions. Foresee more General Collateral (GC) trades with shorter durations, and longer-term evergreen trades, which last for more than one year, may become bullet trades with proper risk management. For unsecured transactions, evergreen trades may also transition to bullet trades, especially if the cost of single-name Credit Default Swaps (CDS) is reasonable for covering specific banking risk exposure.

Dimitri Arlando, Head of EquiLend Data and Analytics EMEA & APAC, Equilend: I think the use of data and performance will continue to evolve. Transparency will continue to increase and we’ve seen that play out already but the regulations that are coming down the pipe like 10c-1, will push that along even further. From a performance perspective, I think we’re going to have another strong year in revenue terms. I think there’s still a lot of turbulence from a macroeconomic perspective to ensure that there will continue to be opportunities for revenue in the lending markets.

Cassie Jones, Managing Director, EMEA Head of Financing Solutions Client Management, State Street: On the back of that I think we should put more power in the hands of the buy-side so they can take advantage of the market volatility in those opportunistic trades in partnership with your lender, but one thing I want everyone to keep an eye on as well,is the balance sheet constraints re-emerging.

Andrew Geggus, Global Head of Agency Lending, BNP Paribas: Long periods of volatility for this year. I think we saw it recently with banks, but I do think we’ll see more episodes occur. I think this will help drive the fixed income area of securities lending to remain as the rockstar. I do think that we also will see some developments in the interoperability space which is really hopeful for me.

Stephen Kiely, Head of the BNY Mellon Securities Finance Client Relationship Management and Business Development Teams in EMEA: I’d like ‘23 to be a year where more beneficial owners come to the realisation that securities lending can do more for them than just be a source of revenue.