The industry faces the constant need to evolve and evolve. At the Securities Finance Technology Symposium, a panel discussion on technologies for solving regulatory burdens dealt with the current market landscape, new regulations and the future appearance of the world of postal trading.
Three regulators discussed what they think will be the future of securities finance regulation, particularly data, and what will be the “next big thing”.
Despite all the hype, according to the first panelist, securities financing is still sleeping on the true power of the blockchain. There are use cases and certain customers are definitely moving toward it, especially for in-house loan programs, they said, but there are still concerns about adopting such a radical technology.
“I know that some of the central counterparties see blockchain as a mechanism for communication and transactions, so I think this is a big technological shift,” said the first panelist. Leverage investments, monetize data, reduce costs, do things more efficiently and automate operations. “I think this is the natural next level,” concluded the expert.
The second market expert said that it is not so much new technology that will shape the future regulatory landscape as “the next big thing for securities markets will be shortening settlement cycles, and obviously we have seen recent problems with retail investors in the US.” . ” .
For retail investing, the panelist asked whether the mainstream market should step in to help new, smaller entrants reduce risk, for example by developing sponsored models to connect counterparties, they added.
The third panelist believes that the future will bring technologies that improve efficiency due to the high cost of capital to run a business. Efficiency gains could be achieved by removing intraday liquidity fees through a blockchain for final settlement, they added. “I think what you start to see and what you see with one or two providers is a lot more focused and how we can move stocks or tokens around the system much more efficiently.”
On the capital side in particular, anything that lowers the cost of capital for borrowers is a positive step in central clearing and “we will continue to see movements in this direction,” concluded the expert.
