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Esma’s Maijoor: securities finance is ‘opaque’
06 June 2014
Esma’s chair applauds proposals to push securities financing transactions onto trade repositories
Reporting of securities financing transactions will give
regulators a good insight into collateral cycles, according to
Steven Maijoor, chair of the European Securities and Markets
He said he was "very happy" that the European Commission had
proposed introducing rules to require such transactions to be
reported on trade repositories.
"Securities financing transactions were left outside the scope
of MiFID, so it is now an opaque market. I am confident that
such a change could bring the same benefits as we are now
observing with the reporting of derivatives to trade
repositories under Emir."
Maijoor said introducing this requirement was important to
allow regulators to have a better picture of collateral and its
risks to the functioning of financial markets. The collateral
market, which includes securities lending, repo and collateral
transformation, has attracted attention from regulators as it
is expected to become more important in the financial markets
as demand rises for high-quality collateral.
Maijoor spoke about the increasingly crucial role of collateral
and said that at times it can become relatively scarce. While
Maijoor did not have an opinion on whether the collateral
market is systemically important, he said "it is clear that we
do not have a sufficient understanding of the functioning of
this part of the market."
Maijoor was speaking at the International Capital Markets
Association’s (Icma) annual general meeting and
conference in Berlin on June 5.