Investment Operations

Five Important Changes to the Repo Market

Repo remains an opaque, relationship-based market compared to other asset classes, according to the latest Aite Group report.

The repurchase agreement (repo) market is undergoing an intense period of change driven by innovation, regulations, and competition. The combining of repo, securities lending, and collateral management represents a convergence toward a single view of the use of collateral inside an organization and has evolved into a single competency area. Buy-side and sell-side firms are positioned to benefit from the repo market’s evolution, particularly in times of heightened volatility. Aite Group’s new report, Five Important Changes to the Repo Market Every Investor Should Know About, describes some of the challenges and changes happening in the securities financing market.

“As the challenges of collateral management, life cycle, and reporting become more acute through the lens of the SFTR reporting regulation, the push for more e-trading and automated processes will become more intense,” explains Audrey Blater, senior analyst at Aite Group.

This Impact Report focuses on five areas linked to the evolution and electronification of the repo market, and what investors might expect to see going forward. It is based on Aite Group interviews of 14 technology firms between August 2019 and February 2020 conducted to gain a better understanding of the market structure of repos, the progression and adoption of new solutions aimed at addressing some of the shortcomings of the market, and the challenges that remain.

For more information on the report, click here.