The news we’re reading this week includes –
- BNY Mellon research finds collateral pressures impacting most buy-side institutions – Finadium, 26th June
In new research, conducted in association with PwC, BNY Mellon has found that collateral pressure is affecting the majority of buy-side institutions. The research reveals that across the world, financial institutions face new mandates in order to collaterise OTC derivatives trades, meaning they need to source large volumes of highly rated securities and cash to post as margin.
As this is happening, the traditional liquidity providers are struggling with balance sheet constraints. As these two forces pull in opposite directions, it becomes increasingly difficult for buy-side entities to locate and access the funding and collateral they require.
- FCA accuses buy-side of greed and outlines plans for single all-in fee – The Trade, 28th June
In a new report, the Financial Conduct Authority (FCA) has criticised the asset management industry, accusing them of being greedy by making profits at the expense of investors. To combat this, it has outlined plans to impose a ‘single all-in fee’.
The report detailed how buy-side organisations consistently earned high profits, suggesting their prices lie above competitive levels. It went onto find that some firms do not disclose some charges to investors, such as transaction costs, before investors make decisions.
Within the report, the FCA proposed a new ‘all-in fee’, which is hoped to drive competitive pressure towards asset managers. It is not the first time this sort of fee has been proposed – last year the FCA outlined similar plans after buy-side firms enjoyed high profits as investors paid high charges, which were not justified by returns.
- ECB weighs in behind Brussels on shifting euro clearing from UK – Financial Times, 21st June
- Euro-clearing land grabbers can still return under a new name – Financial News, 27th June