Asian sec lending market more nuanced than ever - Solway

Asian sec lending market more nuanced than ever - Solway

Securities finance participants have built up a more nuanced approach when it comes to doing business in Asia.

Key considerations in the past, such as basic frameworks and inventory levels, have morphed into more sophisticated considerations in recent years.

“Now, it’s more about the ability to finance, entity type, collateral concentration and tax issues,” said Paul Solway, managing director at BNY Mellon.

Solway is a market veteran having spent 14 years based out of Hong Kong.

He is also the co-chair of Asian securities finance trade body PASLA and opened the group’s annual conference in Seoul this week.

PASLA was set-up in Hong Kong in 1995 and has been the driving force behind the Asian SBL market evolution.

“There are currently nine active equity markets for lending in Asia," Solway added.

“Eventually, when India and China develop offshore lending, we will really have our hands full."

Solway said that Japan and South Korea were the standout markets for lending revenues in 2016. Hong Kong, meanwhile, was a disappointment. 

Glenn Horner -, chair of RMA's securities lending committee and chief regulatory officer of securities finance at State Street - joined Solway on stage at the start of the PASLA event.

He said "disruptive forces" over the past six months such as, Brexit and Donald Trump's administration, will play a role in the regulation of the global securities lending market, including Asia, going forward.

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