Asia Pacific Securities Lending Market User Guide 2020


APRIL 2020

Executive Summary

As we go to print, the world is dealing with an array of macro events that create volatility—some negatively and, as always, some with opportunity. With the ongoing U.S.-China trade negotiations, Britain leaving the European Union, civil unrest in Hong Kong and a new type of virus spreading across the globe, stocks are trading in uncertain ranges as the market grapples with the ultimate impact of all these events.

PASLA is officially 25 years old this year, and along with RMA and EquiLend we have consolidated this user’s guide to most of the markets with SBL platforms across the Asia Pacific region. As well as presenting the nuances and access capabilities of each market, in this guide we offer a sense of where markets are heading with illustrative content. This is all subject to change, of course, but we have endeavored to share the same information that we have right now from our interactions with market participants, exchanges and regulators.

We open up the next 25 years with a rapidly growing and developing Chinese market, where the pace of reform and levels of engagement are hugely encouraging. China remains one of the most exciting opportunities to navigate as we look forward. We are also encouraged by the evolution of the Indonesian market and its desire to grow the product mix, including the expansion of its securities lending program. Into the development mix is also the Philippine Stock Exchange, which announced in late December the approval of securities lending and short selling.

Growing Asian markets, including growth in the corporate bond market, has enabled APAC to overtake European Union trading in revenue terms for the first time. The perception has been that the newer markets of Korea and Taiwan—which have, respectively, seen year-on-year market gains—are the main drivers of this dynamism, yet Japan retains its capital crown. Maintaining its position as the second largest global exchange after NYSE/AMEX, contributing 30% to 50% of yearly regional profit, the Tokyo Stock Exchange remains the backbone of Asian markets, despite the perception that new markets will always present the most attractive opportunities to investors as drivers of growth.

PASLA, RMA and EquiLend would like to offer our sincerest appreciation to all the Asia-Pacific securities finance experts who have contributed to this user guide. The information contained in this guide was compiled from publicly available information as well as contributions from domestic and international market participants, exchanges and independent consultants. We welcome any feedback and suggestions. Most of all, we look forward to our continued work with the Asia-Pacific securities finance industry and updating this guide yearly as advancements are made across the region.

+(852) 3743-8143

Director, Securities Lending and Global Markets Risk
+1 (215) 446-4122

+(212) 901 2217

Who We Are

EquiLend is a global financial technology firm offering trading, post-trade, market data, regulatory and clearing services for the securities finance, collateral and swaps industries. EquiLend has offices in New York, Boston, Toronto, London, Dublin, Hong Kong and Tokyo.

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