Repo markets: COVID-19, the validation of the electronification model and SFTR

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The Covid-19 crisis has not only had repercussions for repo market participants by delaying the regulatory deadlines of 2020, like the EU’s Securities Financing Transactions Regulation (SFTR), but has significantly altered the trading environment. During the exceptionally stressed conditions experienced in February and March, repo markets stood up well according to a recent survey published by the International Capital Market Association (ICMA). Interestingly, the crisis has validated the electronic model and added greater weight to the debate that embedding electronic workflows is not only necessary for regulatory alignment, but can help market participants navigate the unique set of conditions they have been forced to operate in.

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