Next Generation of Repo: Seven Innovations You Should Care About (and Prepare For)

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28 March 2018

Key research questions

  • Why write about the repo market now?
  • What are the seven repo innovations you should care about?
  • What structural changes could impact the market?


Repo is THE tool to leverage for collateral management. Celent tells you how.

The global repo market is ripe for change after years of stagnation and illiquidity. Not only EMIR and Basel III, but even more so now MiFID 2 and SFTR, will drive change in the European market; the end of quantitative easing (QE) and Brexit will also trigger strong market movements; and market infrastructure and technology will also have impacts on repo. Celent presents seven innovative ways to come out on top leveraging: clients, business model, products, trading protocols, processes, technology, and infrastructure.

Though the repo market is a niche for the technicians of liquidity and collateral management, with the impact of the G20 financial regulatory reforms it has become a central product to be leveraged by market participants to optimize balance sheet and financial returns.

In this report Celent analyses the current state of the global repo market to show why it is at an inflection point in terms of volumes but also why more recent regulatory, macroeconomic, market infrastructure, and technology drivers will be the cherry on the cake to make it a priority for all pre- to post-trade market participants in the next two years.

Indeed, the end of QE in the US and soon in Europe, the moving trading value chain, but even more so the implementation of MiFID2 and the imminent implementation of the less known Securities Financing Transactions Regulation (SFTR) will force transparency and reporting and automation on the Repo market. This will in turn provide opportunities for technology solutions to leverage the vast amount of data made available to automate this market, which is often still very manual, voice-traded with fax confirmations.