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Country Profiles: Up and Coming Markets
15 March 2017
Beyond the major lending markets there are several others on the verge of becoming established including Malaysia, Indonesia, India and the Philippines
Current key challenges include the need for local currency
collateral and for counterparts to transact under local law.
These issues will require resolution if
Indonesia’s potential as a jurisdiction for
securities borrowing and lending is to be fulfilled, and
industry participants are continuing to engage with regulators
to reach that end-goal.
The general regulatory framework for securities borrowing and
lending (SBL) in the Philippines was put in place in 2006. SBL
remains bilateral and is mostly for fails settlement. Parties
to the SBL are usually trading participants and investment
"The Philippine stock market has yet to experience the full
vibrancy offered by SBL given the limited supply and the
absence of short selling," said Hans B. Sicat president and CEO
of the Philippine Stock Exchange. "With the launch of ETFs and
the expected introduction of short selling in the market, the
PSE realizes the need for increased access to SBL."
Sicat says the exchange has been in regular contact with
international banks throughout the development process of its
SBL and short selling regulations. "We think that there is
significant interest, which we hope to realize by providing
regulations that will be acceptable to these
"Increasing the supply available for securities lending and
getting our short selling programme off the ground is therefore
one of the priority initiatives of the exchange."
ICBC Standard Bank: Expert eye on
The Philippines has a clean netting opinion for GMRA activity.
Although there is currently an active market with local banks
in international securities, it would seem that this is not the
main area of focus going forward. The financing of local assets
against US dollar is of great interest to local banks and
According to Wei-Shee Chia of ICBC Standard Bank: "Regional
assets, denominated in local currencies, are becoming more
accessible in the global markets. ICBC Standard Bank has local
knowledge and risk appetite to provide this product in the
Philippines and is actively looking to expand its footprint in