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Introduction to Jonathan Adams, Securities Finance Lead

Jonathan Adams

May 31, 2023

Last month I was delighted to join Margin Reform as part of its growth strategy and desire to increase its product coverage. Before joining, I had become aware that the firm had differentiated itself by placing great emphasis on providing the broader margin and collateral industry with an awareness and impact of issues both current and on the horizon, via its punchy, concise and regular content shared via its social media channels. So, a fresh start for me and a new approach to familiar challenges when supporting clients in achieving their goals

At MarginReform, we recognise that securities finance, collateral and margin management have become inextricably linked. Regulation has added greater diversity to the demand drivers for securities collateral usage, with firms having to post initial margin for cleared and uncleared OTC derivatives. A rising interest rate environment has increased the cost of sourcing eligible collateral outside an organisation. Similarly, the growth of tri-party securities lending has made lending securities and taking securities as collateral administratively straightforward for both borrowers and lenders.

Firms have had to respond by becoming more efficient with using their own securities inventory and embark on an enterprise-wide approach to organising and determining the eligibility of their own securities inventory and using it efficiently across various uses. The securities finance marketplace is where ineligible collateral securities are traded for eligible collateral that firms can utilise.  

An effective securities finance function, irrespective of organisation type, is the holistic decision tool for determining the stability of securities inventory for using the various collateral obligations and which inventory has lending value. However, legacy technology, both pre-trade and post-trade, is often an impediment to achieving this business process and has put a strain on users, those supporting it and necessary supplementary applications.

The MarginReform mantra EDUCATE, MITIGATE, and TRANSFORM now has a broader remit. We can support firms who want to build or extend their securities finance capabilities and maybe looking to up skill their teams through the Margin Reform Institute ofCollateral.

Moreover, we can support the planning, design, choice of technology and delivery for all or part of your change or transformation agenda.