The transparency and reporting rules could attract new beneficial owners to lend their securities, the final panel broadly agreed.
 
Denis Treboit, head of securities lending group at Societe General Securities Services, said he expects the increased level of transparency to give risk managers and compliance officers a better understanding of securities lending.

Those asset owners that currently do not lend their securities tend to sit on high-quality securities and hold them until maturity. These potential clients are “winners” as they will benefit from the new framework for securities lending, he said. However, he acknowledged that the regulation could “restrain the potential profitability” of these transactions.

Fredrik Carstens, managing director and co-head of agency securities lending Emea at Deutsche Bank, was also “pretty optimistic” as he expected the entrance of new German clients. “It is a difficult environment but the interest is there to generate the extra return and we as a provider need to be able to have the platform to make that happen,” he said.

Oliver Decker, legal counsel, BayernInvest said German beneficial owners such as his firm would benefit from the increased demand for high-quality collateral.

“We will be the winners because due to the scarcity of collateral by Emir and Dodd-Frank, we will have high demand of high-level securities which we hold because there are very conservative investors in Germany with high volume of securities in their portfolios. And maybe banks are interested to have that for their own collateral for Emir.”

However, David Lewis, senior vice president of SunGard Astec Analytics noted there was a “conflict” between conservative funds with large inventories of high quality assets and the demand for collateral transformation trades. There could be “obstacles” in encouraging such funds to give up their high-quality assets for lowergrade collateral.