PASLA: South Korea switched on for SBL
04 March 2016 Singapore
Image: Shutterstock
South Korea is currently the most promising securities borrowing and lending (SBL) market, while China “will have a huge impact on the global SBL market”, if it ever opens, according to PASLA panellists.
The South Korean two-tier system, which offers a choice of using a central counterparty (CCP) or bilateral method, was given unanimous praise by the panel made up of both buy- and sell-side representatives.
It was described by industry experts based in Asia as a liquid and accessible market that is rapidly gaining offshore investment and attention.
Just over half of delegates at the 13th PASLA/RMA Conference in Singapore voted to hear primarily about either South Korea or China out of the six Asian SBL markets.
When asked to define how important China could potentially be for the global SBL industry, one panellist claimed “it will be the most significant market of our careers”.
The Hong Kong-Shenzhen Stock Connect was highlighted as a potential driver that could kick-start the SBL industry in China, although the latest unconfirmed launch date was Q3 2017.
Panellists also voiced hope that agent lenders, who are currently excluded from the Shanghai-Hong Kong Stock Connect, will soon be allowed to participate on both platforms and boost liquidity in the process.
One panellist and Stock Connect participant summarised, saying: “We still see challenges [in the Stock Connect] but we are closer than we were.”
India was the next market that most captured the imaginations of delegates. As the only Asian market with a central counterparty model, India presents a certain amount of unique problems, which several market participants are currently grappling with. The Securities and Exchange Board of India (SEBI) has recently taken on industry concerns around the lack of offshore SBL activity and general lack of liquidity.
“It’s very reassuring to see that they [SEBI] understand there is a problem with the product in their market,” said a panellist.
During this panel, and in several others, PASLA members were praised by industry figures for their involvement in the many regulatory reforms that the industry is seeing across the region.
The South Korean two-tier system, which offers a choice of using a central counterparty (CCP) or bilateral method, was given unanimous praise by the panel made up of both buy- and sell-side representatives.
It was described by industry experts based in Asia as a liquid and accessible market that is rapidly gaining offshore investment and attention.
Just over half of delegates at the 13th PASLA/RMA Conference in Singapore voted to hear primarily about either South Korea or China out of the six Asian SBL markets.
When asked to define how important China could potentially be for the global SBL industry, one panellist claimed “it will be the most significant market of our careers”.
The Hong Kong-Shenzhen Stock Connect was highlighted as a potential driver that could kick-start the SBL industry in China, although the latest unconfirmed launch date was Q3 2017.
Panellists also voiced hope that agent lenders, who are currently excluded from the Shanghai-Hong Kong Stock Connect, will soon be allowed to participate on both platforms and boost liquidity in the process.
One panellist and Stock Connect participant summarised, saying: “We still see challenges [in the Stock Connect] but we are closer than we were.”
India was the next market that most captured the imaginations of delegates. As the only Asian market with a central counterparty model, India presents a certain amount of unique problems, which several market participants are currently grappling with. The Securities and Exchange Board of India (SEBI) has recently taken on industry concerns around the lack of offshore SBL activity and general lack of liquidity.
“It’s very reassuring to see that they [SEBI] understand there is a problem with the product in their market,” said a panellist.
During this panel, and in several others, PASLA members were praised by industry figures for their involvement in the many regulatory reforms that the industry is seeing across the region.
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