Global vision, local precision: The path to enabling success with securities finance technology
21 January 2025
Darren Crowther, head of Securities 麻豆影视传媒 and Collateral Management at Broadridge, explores the challenges of harmonising local approaches with a global vision, and why a mutualised platform holds the key to unlocking the future of securities finance
Image: stock.adobe.com/mangolovemom
The securities finance industry continues to expand and grow in new markets and client segments. These positive steps increasingly cause local practices and regulatory demands to collide with the push for efficiency and integration.
As firms expand east and west, the need for a global platform that accommodates local features is more necessary than ever before.
The local-to-global shift: Why now?
Traditionally, securities finance has operated on a region-specific basis, reflecting local market structures, regulatory environments, and cultural practices. While this approach has its obvious advantages, it also creates inefficiencies and limits the ability to scale.
In an increasingly interconnected world, financial markets should demand platforms that transcend national boundaries. The move toward a global model is driven by several factors, including investor demands and regulatory pressure.
In terms of investor demands, sovereign wealth funds, pension funds, and other institutional investors 鈥� managing assets collectively worth over US$50 trillion globally 鈥� require seamless access to diverse markets.
While regulations such as the Securities Financing Transactions Regulation (SFTR) in Europe and evolving frameworks in the Middle East demand transparency and consistency across borders.
The challenge now is how to shift from fragmented local systems to a unified global platform support without losing the unique features that local markets require.
Shifting from a localised approach to a global platform introduces significant challenges. Understanding these complexities is crucial for designing a solution that works for all stakeholders.
1. Regulatory fragmentation
Financial regulations often reflect national priorities. For instance:
Europe鈥檚 SFTR and European Market Infrastructure Regulation (EMIR) have a strong focus on transparency and risk.
Middle Eastern markets, particularly in the Gulf Cooperation Council (GCC) countries, may choose to incorporate Sharia-compliant finance principles, adding unique layers of complexity.
Any global platform must be capable of adapting to these diverse frameworks while maintaining a consistent operational standard.
2. Infrastructure disparities
Post-trade infrastructures in North America, Europe, the Middle East, and Asia are at varying stages of maturity.
鈥� North America, post T+1, now has US Treasury Clearing rules and 10c-1 regulations to implement in 2025.
鈥� In Europe, despite initiatives like TARGET2-Securities, the upcoming T+1 discussions remain fragmented, with multiple Central Securities Depositories (CSDs) and central counterparties (CCPs).
鈥� The Middle East is undergoing rapid development, with emerging market growth and the introduction of local securities finance markets.
鈥� Asia continues to mature in the securities finance space with large regional banks looking west to service client demand.
Bridging these demands is critical to ensuring global interoperability.
The benefits of standardisation
Despite the challenges, moving from a local to a global approach offers immense benefits for the securities finance industry.
A global platform can streamline trade execution, settlement, and reporting, reducing duplication and manual intervention. We are seeing that trade settlement times could be reduced from days to hours with the right infrastructure.
In terms of greater transparency and compliance, standardised platforms ensure compliance with global regulations, reducing the risk of penalties. For example, real-time reporting capabilities can address the data-intensive requirements of SFTR in Europe while meeting emerging Middle Eastern reporting standards.
Improved liquidity is another benefit of moving from a local to a global approach. Global platforms can aggregate liquidity across regions, enabling investors to access a broader range of assets. An example is Middle Eastern sovereign wealth funds, managing over US$3.5 trillion, that can now deploy capital more efficiently in global markets through such platforms.
Lastly, the move offers scalability and adaptability. By adopting modular designs, global platforms can accommodate local market-specific features while scaling to meet future demands. Additionally, operational resilience is enhanced by the ability to quickly adapt to market changes and disruptions, ensuring continuous service and reliability across diverse regions.
Technological enablers for global platforms
The transition from local to global approaches in securities finance relies heavily on technology. Key technologies driving this change include distributed ledger technology (DLT), AI, and machine learning (ML).
DLT provides a shared, immutable record of transactions, reducing reconciliation efforts. A recent European Central Bank (ECB) pilot has shown that DLT can reduce post-trade costs by 20-30 per cent, while enhancing security and transparency.
While artificial Intelligence enables smarter decision-making through advanced data analytics. Through analysing market data, AI can optimise collateral management, reducing costs by up to 15 per cent according to industry studies.
Building a collaborative framework
Transitioning to a global securities finance platform with localised features requires collaboration across multiple stakeholders. Here鈥檚 what the industry must do.
1. Harmonise regulations
Regulators must work together to align frameworks, creating a baseline standard while respecting local differences. Europe鈥檚 Capital Markets Union offers a roadmap for achieving greater harmonisation.
2. Invest in technology
Market participants must prioritise investment in scalable and interoperable technologies that can bridge the gap between local and global markets.
3. Encourage industry collaboration
Trade associations, technology providers, and regulators must establish forums to share best practices and co-create solutions.
The promise of a global, localised future
The securities finance industry globally is at a turning point. Moving from a local to a global approach is no longer optional 鈥� it is essential for driving efficiency, transparency, and growth.
By adopting mutualised platforms that combine global standards with local adaptability, the industry can unlock new opportunities for cross-border collaboration, liquidity, and innovation. The vision of a unified platform is not just about connecting markets; it鈥檚 about creating a resilient, efficient, and inclusive financial ecosystem that benefits all participants.
The time for action is now. Broadridge is embracing this shift to help the securities finance industry transform from a patchwork of local practices to a cohesive global network 鈥� delivering on the promise of global vision with local precision.
Broadridge鈥檚 Securities 麻豆影视传媒 and Collateral Management (SFCM) platform supports global operations while allowing local customisation. Its ability to manage multi-asset trading and comply with regional regulations makes it a strong example of a hybrid local-global approach.
As firms expand east and west, the need for a global platform that accommodates local features is more necessary than ever before.
The local-to-global shift: Why now?
Traditionally, securities finance has operated on a region-specific basis, reflecting local market structures, regulatory environments, and cultural practices. While this approach has its obvious advantages, it also creates inefficiencies and limits the ability to scale.
In an increasingly interconnected world, financial markets should demand platforms that transcend national boundaries. The move toward a global model is driven by several factors, including investor demands and regulatory pressure.
In terms of investor demands, sovereign wealth funds, pension funds, and other institutional investors 鈥� managing assets collectively worth over US$50 trillion globally 鈥� require seamless access to diverse markets.
While regulations such as the Securities Financing Transactions Regulation (SFTR) in Europe and evolving frameworks in the Middle East demand transparency and consistency across borders.
The challenge now is how to shift from fragmented local systems to a unified global platform support without losing the unique features that local markets require.
Shifting from a localised approach to a global platform introduces significant challenges. Understanding these complexities is crucial for designing a solution that works for all stakeholders.
1. Regulatory fragmentation
Financial regulations often reflect national priorities. For instance:
Europe鈥檚 SFTR and European Market Infrastructure Regulation (EMIR) have a strong focus on transparency and risk.
Middle Eastern markets, particularly in the Gulf Cooperation Council (GCC) countries, may choose to incorporate Sharia-compliant finance principles, adding unique layers of complexity.
Any global platform must be capable of adapting to these diverse frameworks while maintaining a consistent operational standard.
2. Infrastructure disparities
Post-trade infrastructures in North America, Europe, the Middle East, and Asia are at varying stages of maturity.
鈥� North America, post T+1, now has US Treasury Clearing rules and 10c-1 regulations to implement in 2025.
鈥� In Europe, despite initiatives like TARGET2-Securities, the upcoming T+1 discussions remain fragmented, with multiple Central Securities Depositories (CSDs) and central counterparties (CCPs).
鈥� The Middle East is undergoing rapid development, with emerging market growth and the introduction of local securities finance markets.
鈥� Asia continues to mature in the securities finance space with large regional banks looking west to service client demand.
Bridging these demands is critical to ensuring global interoperability.
The benefits of standardisation
Despite the challenges, moving from a local to a global approach offers immense benefits for the securities finance industry.
A global platform can streamline trade execution, settlement, and reporting, reducing duplication and manual intervention. We are seeing that trade settlement times could be reduced from days to hours with the right infrastructure.
In terms of greater transparency and compliance, standardised platforms ensure compliance with global regulations, reducing the risk of penalties. For example, real-time reporting capabilities can address the data-intensive requirements of SFTR in Europe while meeting emerging Middle Eastern reporting standards.
Improved liquidity is another benefit of moving from a local to a global approach. Global platforms can aggregate liquidity across regions, enabling investors to access a broader range of assets. An example is Middle Eastern sovereign wealth funds, managing over US$3.5 trillion, that can now deploy capital more efficiently in global markets through such platforms.
Lastly, the move offers scalability and adaptability. By adopting modular designs, global platforms can accommodate local market-specific features while scaling to meet future demands. Additionally, operational resilience is enhanced by the ability to quickly adapt to market changes and disruptions, ensuring continuous service and reliability across diverse regions.
Technological enablers for global platforms
The transition from local to global approaches in securities finance relies heavily on technology. Key technologies driving this change include distributed ledger technology (DLT), AI, and machine learning (ML).
DLT provides a shared, immutable record of transactions, reducing reconciliation efforts. A recent European Central Bank (ECB) pilot has shown that DLT can reduce post-trade costs by 20-30 per cent, while enhancing security and transparency.
While artificial Intelligence enables smarter decision-making through advanced data analytics. Through analysing market data, AI can optimise collateral management, reducing costs by up to 15 per cent according to industry studies.
Building a collaborative framework
Transitioning to a global securities finance platform with localised features requires collaboration across multiple stakeholders. Here鈥檚 what the industry must do.
1. Harmonise regulations
Regulators must work together to align frameworks, creating a baseline standard while respecting local differences. Europe鈥檚 Capital Markets Union offers a roadmap for achieving greater harmonisation.
2. Invest in technology
Market participants must prioritise investment in scalable and interoperable technologies that can bridge the gap between local and global markets.
3. Encourage industry collaboration
Trade associations, technology providers, and regulators must establish forums to share best practices and co-create solutions.
The promise of a global, localised future
The securities finance industry globally is at a turning point. Moving from a local to a global approach is no longer optional 鈥� it is essential for driving efficiency, transparency, and growth.
By adopting mutualised platforms that combine global standards with local adaptability, the industry can unlock new opportunities for cross-border collaboration, liquidity, and innovation. The vision of a unified platform is not just about connecting markets; it鈥檚 about creating a resilient, efficient, and inclusive financial ecosystem that benefits all participants.
The time for action is now. Broadridge is embracing this shift to help the securities finance industry transform from a patchwork of local practices to a cohesive global network 鈥� delivering on the promise of global vision with local precision.
Broadridge鈥檚 Securities 麻豆影视传媒 and Collateral Management (SFCM) platform supports global operations while allowing local customisation. Its ability to manage multi-asset trading and comply with regional regulations makes it a strong example of a hybrid local-global approach.
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