GPFA aims to increase peer-to-peer trading in securities lending and repo markets
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GPFA aims to increase peer-to-peer trading in securities lending and repo markets 24 July 2020Boston Reporter: Natalie Turner
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The Global Peer Financing Association (GPFA), a non-profit association, has been formed with four pension plans, all aiming to increase peer-to-peer trading activity in the securities lending and repo markets for the benefit of asset owners.
The four pension plans, California Public Employees' Retirement System (CalPERS), Healthcare of Ontario Pension Plan (HOOPP), Ohio Public Employees Retirement System (OPERS), and State of Wisconsin Investment Board (SWIB) came together to create GPFA alongside sponsorship from eSecLending, Osler, Hoskin & Harcourt and Credit Benchmark.
GPFA is interested in expanding membership to include other global pensions, asset managers, insurance companies and other beneficial owners who share a common interest in the business of peer-to-peer securities lending or repo.
Jerry May, senior portfolio manager at OPERS, explains: “GPFA has developed a framework of resources to help other peers understand and navigate the approval process as well as the ongoing administration of trades for those that do not have internal resources to support securities lending or repo activity directly.”
Dan Kiefer, investment manager at CalPERS, highlights: “By transacting with our peers, we have been able to increase revenue generated from our securities lending and repo activities while also expanding sources of liquidity for our plan.”
“There are several benefits we appreciate from our involvement in peer transactions,” states Christopher Benish, managing analyst at SWIB. “We are diversifying our counterparts and including these highly-creditworthy entities while also benefiting from lower costs, increased transparency on the trades and greater information sharing amongst the group.
“We also like the predictability of demand where balances are more stable than with traditional banking counterparts over month-ends and quarter-ends.”
Rob Goobie, assistant vice president of collateral management, derivatives & fixed income at HOOPP states: “We see GPFA as a central connection point to foster collaboration and information sharing within the buy-side community.”
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