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Walter Verbeke, global head of business
model and innovation, Euroclear
Crypto: The dawn of a new asset class
Despite the initial hype and volatility around cryptocurren-
cies, we do see momentum within capital markets towards
a new asset class. One example is the piloting of securities
token offerings (STOs) as a possible small and medium
size enterprise funding channel. We have also seen good
progress in the DLT/blockchain space within the securities
world. Some of the initiatives that are contributing to this
momentum include LiquidShare in Paris, Australia Stock
Exchange’s work with Digital Asset Holdings and the World
Bank’s recent launch of the first blockchain based bond -
Asset managers will embrace
horizontal integration
The pressure on asset managers to deliver returns while
improving their operating models to support growth, increase
efficiency and improve risk oversight will not diminish in the
year ahead. But 2019 will be the year in which asset manag-
ers begin to realise the opportunity of horizontal integration
across their operating models, counterparties, and third-party
Get ready for SDR, CSDR and SFTR
With most Brexit preparations out of the way, the
market will focus on the Settlement Discipline Regime
(SDR) component of the Central Securities Depositories
Regulation (CSDR) due to enter into force in 2020. It will
become increasingly clear how complex and expensive
the new buy-in and failed trade penalties will be. As
such, industry collaboration, across the buy-side and
sell-side, will be essential for an orderly roll-out.
Other areas of regulatory focus during 2019 and into
2020 will be centred on the Securities Financing Trans-
BONDI.
Asset managers, custodians and market infrastructures
are all moving into or closely following the crypto asset
space. It will be interesting to see in 2019 how all these
market players address the need for crypto and digital
assets. The objective will be the same, whether it be in the
traditional physical security or crypto world – a need for a
safe and efficient environment that gives comfort, allows
liquidity generation for investors and the facilitation of
trading and servicing of those assets.
Chris Remondi, partner,
Brown Brothers Harriman
providers. Emerging technologies, improved connectivity
and an ability to create an enterprise view of data across
mandates and end-to-end operating models will provide
opportunities to improve overall performance. Increased
competency in all of these areas will grow in importance as
margin compression continues its downward trend.
Tony Freeman, executive
director, government & industry
relations, DTCC
actions Regulation (SFTR) and phases four and five of
the uncleared margin rules. Both are new regulations
which will drive new technology and operational pro-
cesses across the buy-side and sell-side and so prepara-
tions will need to begin in earnest early next year.
Lastly, I anticipate that mainstream institutional
investors will continue to shun cryptocurrencies but
projects such as the Swedish central bank’s e-Krona in-
itiative will spur custodian banks to launch crypto asset
capabilities.
Winter 2018
globalcustodian.com
45