Beneficial owners form P2P association

Beneficial owners form P2P association

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A group of beneficial owners have formed an association to create a more efficient way of engaging in peer-to-peer (P2P) securities financing transactions.

The Global Peer Financing Association (GPFA) was unveiled at the IMN’s Annual Beneficial Owners' International Securities Finance & Collateral Management Conference in Fort Lauderdale, Florida, on February 12.

The group of beneficial owners is still awaiting its association status – which it is hoping to receive in “the next couple of weeks” – but revealed its goal of becoming one of the industry’s larger associations.

Speaking at the conference, Brooke Gillman, managing director, client relationship management at eSecLending, said: “This group has banded together to form an association that is in its final stages of actual formation, which is meant for peers – beneficial owners.

“We have a lot of associations in this industry that all cooperate well with one another and we are hoping that this (GPFA) becomes one of those in the long term.”

She added that this association is “buy-side by the buy-side for the buy-side”.

The original members of the GPFA are CalPERS, Healthcare of Ontario Pension Plan (HOOPP), State of Wisconsin Investment Board (SWIB) and Ohio Public Employee Retirement System (OPERS).

Three firms have also partnered with the association to support its objectives, and they are: eSecLending, Credit Benchmark, and Osler, Hoskin & Harcourt LLP.

Although the association is still in its infancy, its original members stressed that it is keen to grow opportunities with other global beneficial owner peers, adding that it is has received a great deal of interest.

Robert Goobie, assistant vice president, collateral management at HOOPP, noted that while they do not want to add further members before receiving association status, around 40 to 50 other pension plans want to be a part of the GPFA.

Mike Johnson, an investment officer at CalPERS, said: “We’ve all gotten together and bumped heads and for several years, our executive teams have been involved in the process (of setting this up) and now it is time to put our money where our mouth is.

“I’m excited to expand the peer group. The more members we have, the more efficient the securities finance market is going to be and along with that, more opportunities.”

A group of market participants discussed the benefit and the challenges beneficial owners face in terms of P2P lending at an industry roundtable in December.

IHS Markit announced its partnership with Credit Benchmark on February 11, citing that the move will bring more transparency for all players in the securities finance market.

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