The Canadian perspective: A digest of market trends
24 June 2025
Following a trip to Toronto, industry leaders participated in discussions around the impact of geopolitics on regulation, the changing role of data, and reaching securities finance 2.0
Image: CASLA
Gathering in Toronto for the 15th Annual Conference on Canadian 兔子先生Lending, industry participants had much to discuss following recent geopolitical and economic events impacting the country鈥檚 market.
The event, held at the Omni King Edward Hotel, was hosted by the Canadian 兔子先生Lending Association (CASLA) and discussed a number of themes from optimisation, collateral infrastructure, and emerging talent, to data and securities finance 2.0.
Below is a comprehensive summary on the core messages of this year鈥檚 conference.
The changing role of data in securities finance
It is no longer about having access to data, but about how quickly and intelligently firms can act on that data, according to Sasha Sitsker, senior associate at EquiLend.
The 鈥楧ata, Demand & Disruption: Positioning For The Future鈥� session began with Lou Carvajal, director of securities finance at S&P Global Market Intelligence, who provided a recap on securities lending performance in Q1 2025.
兔子先生lending revenue generated US$2.9 billion for this period, which showed a five per cent year-on-year increase. The main drivers of this revenue were listed as APAC equities, ETFs, and corporate bonds.
鈥淲ith valuations rising, we鈥檙e seeing increased pressure on shorts. In our dataset, we're seeing that around 70 per cent of open shorts are out of money,鈥� adds Carvajal.
鈥淥n the bright side of this, if the Bank of Canada continues to lower rates, and inflation continues to decrease, we see that this could be a potential driver for specials in the Canadian market.鈥�
From an EquiLend perspective, Sitsker revealed that fixed income has continued to be a clear area of strength and growth globally for the securities lending market over the past 12 months.
Providing the bigger picture, Sitsker explained that with inflation having been 鈥渟tickier than anticipated鈥�, expected rate cuts have seen delays around the globe, particularly in the US.
He highlighted how the growing concerns around elevated deficit and the growing deficit, compounded by some of the recent tax legislation, is continuing to fuel volatility in the bond market.
鈥淚n the Canadian bond market, across all categories, with the exception of local and provincial debt, we're actually seeing revenue declines,鈥� he continued.
鈥淐anadian fixed income, being such an interesting outlier, might highlight some of the unique dynamics in the Canadian bond market. And I think that's one of the areas that we'd love to hear some insight on.鈥�
In her review of the past year, Lisa Tomada, vice president, global securities lending at CIBC Mellon, noted how the 鈥渆limination of discounted DRIPS鈥� had significantly impacted revenue of Canadian beneficial owners, as they are the majority holders of those Canadian securities.
Tomada also found that collateral flexibility is 鈥渕ore important now than ever鈥�. In these uncertain times, with borrowers and market participants changing demands, clients that can accept all types of collateral are benefiting from more revenues from their securities lending programmes.
Similarly, David Mak, executive director at Wealthsimple, agreed that the expansion of collateral schedules, as well as the flexibility and fungibility of collateral is 鈥渟o important these days鈥�. He added that there is now a grey area in terms of what is considered acceptable collateral and what is not.
While 10 years ago this was 鈥渧ery defined鈥�, the current era shows that this has changed.
Moving the session forward, Mak said the impact of data is changing the way firms do business, and asked speakers what they are learning from this.
Sitsker began: 鈥淭he role of data in securities finance has fundamentally changed over the past few years. Edge is no longer coming from access to data. Edge comes from the recency of the data, speed of the data transfer, and the depth of the insights that you're getting.鈥�
To that end, he noted the 鈥渂ig push鈥� across the board towards more automation, as well as shorter cycles between trade execution and data consumption. He added that several years ago, the majority of the market may have relied on yesterday's trade data to provide a foundation for today's trade decisions.
He added: 鈥淲e're increasingly seeing clients push towards ingesting real-time data systematically multiple times a day.鈥�
Sitsker noted that securities lending desks are going beyond primary securities lending data and drilling into secondary market metrics such as sentiment analysis and short squeeze scores to make lending and borrowing decisions.
Additionally, alternative business lines are utilising securities lending data for different purposes, including equity and fixed income cash, portfolio management, research and derivatives desks.
As a step forward, firms are going beyond just post-trade statistics, post-trade analytics, and getting into some of these pre-trade data points.
鈥淭he binding constraint is not access to data anymore,鈥� Kunal Shah, director on the equity finance desk at RBC Capital Markets, stated.
He continued: 鈥淚t's dev resources and talent on your desk, and resources on your desk that can actually drive the development of tools and trading strategies to leverage all the data points 鈥� this is where AI can be transformative.鈥�
Sitsker concluded: 鈥淎I is like a high speed train coming at you, it鈥檚 scary, but once you jump on, you鈥檙e going the same speed as the train now. People need to jump on it.鈥�
Geopolitics presents heavy impact on financial legislation
Now more than ever, financial services legislation is being heavily impacted by the geopolitics that is going on all around the world, said Farrah Mahmood, director of regulatory affairs at the International 兔子先生Lending Association (ISLA).
Mahmood reviewed the previous year, in which an unprecedented number of elections took place globally, and which brought with it 鈥渁 significant amount of uncertainty鈥� around new policies. In 2025, the market is starting to see the implementation of these new political mandates take effect.
鈥淭here's definitely been a shift in sentiment towards more nationalist, protectionist, more inward looking policies in some of the big key jurisdictions across the globe,鈥� she continued, 鈥渨hich unfortunately is leading to a much more fragmented regulatory landscape for us.鈥�
From a trade association perspective, Mahmood emphasised how the role of organisations such as ISLA, will be even more focused on advocating for the market, ensuring there is consistency in terms of cross-border business and with regards to the key themes.
According to Mahmood, the current key themes in the market are: competitiveness and simplification; digital innovation and operational resilience; and retail.
Speaking to the market from a Canadian perspective, Laura Paglia, president and CEO of the Investment Industry Association of Canada (IIAC), agreed that the region has seen a new focus on competitiveness.
Paglia suggested that Canada has a highly fragmented regulatory system, with 13 provinces, and no national regulator. 鈥淎s Canadians, we have been highly tolerant and patient of that in the past as it results in duplication, cost, and wasted resources,鈥� she added.
This patience now seems to be waning, and so discussions which did not previously meet fruition, are being had directly.
The session entitled 鈥楻egulators & Policymakers: Global Perspectives on Shifting Views and Assumptions鈥� discussed competitiveness in respect of the US 兔子先生and Exchange Commission鈥檚 (SEC鈥檚) Regulation SHO.
Paglia asked: 鈥淲hen do we align globally and when do we not align globally?鈥� Specifically, she indicated that regulators are exploring short sales that fail to settle, without evidence of a large problem.
The Canadian Investment Regulatory Organization (CIRO) previously published a proposal suggesting there would be mandatory buy-ins on short sales in Canada, in keeping with Regulation SHO in the US. This proposal faced a number of concerns, which Paglia highlighted as she compared the core differences between the US and Canada, for example, Canada has more illiquid assets.
As a key message, Paglia said: 鈥淲e have a tendency in regulatory making to make the cost of implementation and the 鈥榟ow鈥� of implementation a consideration after the rule is made. You have got to look at that part first. And you must prove that the additional obligation that you're putting on market participants makes economic sense.鈥�
The session moved on to discuss the SEC鈥檚 10c-1a regulation, which is facing an implementation deadline in-line with Rule 13f-2.
Providing his perspective on the matter, Thomas Veneziano, head of product, Americas, at Pirum, said: 鈥淭hese two rules have been deemed by the industry as contradictory.鈥� This contradiction has led to a lawsuit brought about by a group of beneficial owners.
He explained: 鈥淚f you look at a lot of the articles that are out there, the beneficial owners may have about a 70 per cent chance of winning that case. In that scenario, you would probably see both rules go back to the SEC for some time for a revision or potentially a withdrawal.鈥�
The situation speaks to the geopolitical landscape which is seeing a pullback from the regulatory regime in the US, noted Veneziano.
While 10c-1a is set to go live on 2 January 2026, the industry is currently in the 鈥渓imbo stage鈥� in respect to this regulation.
Turning to Nancy Steiker, senior director, global securities finance product management at FIS, Mak asked how she sees 10c-1a impacting the US securities lending market.
In her concluding remarks, she said: 鈥淚t鈥檚 one sided reporting, where the lender is taking on all of the cost. How is this going to impact what they are charging for their borrows or their loans? The numbers just don't add up for the amount of modifications that go on a day, on a contract, and reportable events, and how they're going to recoup their build costs.
鈥淚f a loan is going to be a losing cost for a lender, it might actually contract liquidity in the market. It's just going to be a snowball, and the cost of borrowing is just going to get higher and higher.鈥�
Unlocking securities finance 2.0
There is a 鈥渄izzying array鈥� of options in securities finance right now, according to Steve Everett, head of business strategy and Post Trade Innovation at TMX.
Creating a discussion on the fragmentation and technology overload facing the securities finance market, Everett indicated: 鈥淎ll of the digital options, whether it be stable coins or digital assets, these various different widgets can be incredibly confusing.
鈥淭he difference between triparties and the difference with fintechs and the various offerings that they have can be somewhat overwhelming for clients.鈥�
In the final session of the day, entitled 鈥楿nlock 兔子先生Finance 2.0 Through An Integrated Digital Financial Ecosystem鈥�, market participants covered the impact of new technology andthe importance of collaboration.
Ahmed Shadmann, head of agency trading Canada and non-US equities at State Street, noted that over the last couple of years, numerous vendors have presented different kinds of solutions. From his perspective, it has been 鈥渉ard to figure out which one is value-adding and which is not鈥�.
Directing the panel, Everett asked: 鈥淲hile vendors and new technology are solving problems, do they create new ones?鈥�
Shadmann explained that while vendors do not 鈥渃ome to us with problems鈥�, further clarity is required in terms of the solution being presented. For example, how can the solution help firms from end-to-end 鈥� meaning from pre-trade to trade and then to post-trade. From a State Street perspective, the firm is looking for vendors to bring a solution that 鈥渦nderstands what we do鈥�.
While looking at the collaboration between fintechs, the industry, and market infrastructures, Barnaby Nelson, CEO of The ValueExchange, highlighted a number of current trends.
鈥淭here's an awful lot of technologies out there that claim to be a silver bullet, but ultimately, can't really be plugged in easily. Or at least raises more questions,鈥� he explained. 鈥淔or me, there are a surfeit of technology providers, but very few business providers.鈥�
Elaborating, Nelson pinpointed the importance of having someone understand balance sheet constraints for the firm, explain how the solution 鈥減lugs in鈥�, and how it will work with legacy technology, as well as with that particular firm鈥檚 risk and compliance environment.
In addition, he noted that, structurally, collaboratively owned entities are what work, and 鈥渢here鈥檚 got to be skin in the game鈥�.
From a Canadian perspective, Yvette Wu, CEO of Yield Exchange, said: 鈥淔rom a fintech point of view, we have been welcomed into the securities finance space. The benefit of this space is that it is a tight-knit community.
鈥淔or us, as a new fintech entrant, having a partnership with TMX, we鈥檙e able to come in and share and communicate what the value proposition is 鈥� and sometimes that鈥檚 the hardest part, getting in front of the user base.鈥�
Wu highlighted a second challenge for fintechs, which is change. As part of human nature, people can be 鈥渜uite uncomfortable鈥� with change.
鈥淚n this space, to get to that vision of 2.0, is to embrace this change, but we're seeing this happen already. There's a lot of momentum. There's a tonne of collaboration that's happening,鈥� she continued. 鈥淚t鈥檚 a really exciting time to be a fintech in this Canadian ecosystem.鈥�
The panel moved on to discuss the Nirvana state of securities finance 2.0, and how differently facing the global financial crisis would have been with this at hand. Kelly Mathieson, chief business development officer at Digital Asset, was instrumental during this market cycle while stationed at J.P. Morgan.
Commenting on this idea, she said: 鈥淔irstly, there is no amount of new technology or operating process around it that's going to replace humans making good business decisions or having appropriate risk assessment or just common sense. What is different, is that these technologies are going to change the way those decisions and risk activities are understood, managed and conducted in the market.鈥�
In this respect, Mathieson referred to developments such as distributed ledger technology (DLT), blockchain, and smart contracts. In addition, what would be different from a technology perspective, she added, would be the access to, and clarity on, data, which would be provided in a more real-time, continuous way.
Mathieson explained: 鈥淲e're now not only talking about data and its accessibility and clarity, but that data is now recorded in a way on a ledger that is immutable and that only exists because the parties to that data have agreed that it's accurate and will be written to the record.鈥�
Adding to the discussion, Guido Stroemer, CEO of HQLAX, analysed market adoption and what is needed for fintechs and existing infrastructure providers to work together. He indicated that the key is a good business case. Having reviewed market feedback regarding the use of blockchain technology in the collateral management space, Stroemer found that participants were more focused on a business case that could reduce settlement cycles and transfer ownership with more precision, than what technology was used.
In terms of collaboration, Stroemer said: 鈥淭here's a clear need for collaboration between fintechs and existing infrastructure providers. The key element here is that to provide value and to promote market adoption, the solutions need to be able to be implemented without a massive change to the way that existing market participants engage with the market.鈥�
Commenting on the matter, Fabrice Tomenko, head of digital trust and strategic partnerships at Clearstream, stated: 鈥淥ur goal is to minimise the impact on market participants. However, striking the right balance is challenging as we must ensure we鈥檙e still delivering value. At times, in our efforts to reduce disruption, we constrain our ability to fully leverage the potential of new, innovation-driven business models by clinging too tightly to established ways of working.鈥�
Concluding, Everett emphasised Stroemer's point on avoiding a massive change 鈥� or as Stroemer put it at the time, 鈥渂ig bang change鈥� 鈥� to how market participants engage with the market.
Everett said: 鈥淎 lot of these new infrastructure technologies, that is the conclusion at this point, it鈥檚 not going to be a big bang. When a lot of this came out, or when something new comes up, the most unhelpful word is 鈥榙isruption鈥�.
鈥淚t鈥檚 not about disruption, it鈥檚 about incremental evolution, and especially in our world, where you have to take risk and compliance with you on every step of the journey. Education is critical.鈥�
The event, held at the Omni King Edward Hotel, was hosted by the Canadian 兔子先生Lending Association (CASLA) and discussed a number of themes from optimisation, collateral infrastructure, and emerging talent, to data and securities finance 2.0.
Below is a comprehensive summary on the core messages of this year鈥檚 conference.
The changing role of data in securities finance
It is no longer about having access to data, but about how quickly and intelligently firms can act on that data, according to Sasha Sitsker, senior associate at EquiLend.
The 鈥楧ata, Demand & Disruption: Positioning For The Future鈥� session began with Lou Carvajal, director of securities finance at S&P Global Market Intelligence, who provided a recap on securities lending performance in Q1 2025.
兔子先生lending revenue generated US$2.9 billion for this period, which showed a five per cent year-on-year increase. The main drivers of this revenue were listed as APAC equities, ETFs, and corporate bonds.
鈥淲ith valuations rising, we鈥檙e seeing increased pressure on shorts. In our dataset, we're seeing that around 70 per cent of open shorts are out of money,鈥� adds Carvajal.
鈥淥n the bright side of this, if the Bank of Canada continues to lower rates, and inflation continues to decrease, we see that this could be a potential driver for specials in the Canadian market.鈥�
From an EquiLend perspective, Sitsker revealed that fixed income has continued to be a clear area of strength and growth globally for the securities lending market over the past 12 months.
Providing the bigger picture, Sitsker explained that with inflation having been 鈥渟tickier than anticipated鈥�, expected rate cuts have seen delays around the globe, particularly in the US.
He highlighted how the growing concerns around elevated deficit and the growing deficit, compounded by some of the recent tax legislation, is continuing to fuel volatility in the bond market.
鈥淚n the Canadian bond market, across all categories, with the exception of local and provincial debt, we're actually seeing revenue declines,鈥� he continued.
鈥淐anadian fixed income, being such an interesting outlier, might highlight some of the unique dynamics in the Canadian bond market. And I think that's one of the areas that we'd love to hear some insight on.鈥�
In her review of the past year, Lisa Tomada, vice president, global securities lending at CIBC Mellon, noted how the 鈥渆limination of discounted DRIPS鈥� had significantly impacted revenue of Canadian beneficial owners, as they are the majority holders of those Canadian securities.
Tomada also found that collateral flexibility is 鈥渕ore important now than ever鈥�. In these uncertain times, with borrowers and market participants changing demands, clients that can accept all types of collateral are benefiting from more revenues from their securities lending programmes.
Similarly, David Mak, executive director at Wealthsimple, agreed that the expansion of collateral schedules, as well as the flexibility and fungibility of collateral is 鈥渟o important these days鈥�. He added that there is now a grey area in terms of what is considered acceptable collateral and what is not.
While 10 years ago this was 鈥渧ery defined鈥�, the current era shows that this has changed.
Moving the session forward, Mak said the impact of data is changing the way firms do business, and asked speakers what they are learning from this.
Sitsker began: 鈥淭he role of data in securities finance has fundamentally changed over the past few years. Edge is no longer coming from access to data. Edge comes from the recency of the data, speed of the data transfer, and the depth of the insights that you're getting.鈥�
To that end, he noted the 鈥渂ig push鈥� across the board towards more automation, as well as shorter cycles between trade execution and data consumption. He added that several years ago, the majority of the market may have relied on yesterday's trade data to provide a foundation for today's trade decisions.
He added: 鈥淲e're increasingly seeing clients push towards ingesting real-time data systematically multiple times a day.鈥�
Sitsker noted that securities lending desks are going beyond primary securities lending data and drilling into secondary market metrics such as sentiment analysis and short squeeze scores to make lending and borrowing decisions.
Additionally, alternative business lines are utilising securities lending data for different purposes, including equity and fixed income cash, portfolio management, research and derivatives desks.
As a step forward, firms are going beyond just post-trade statistics, post-trade analytics, and getting into some of these pre-trade data points.
鈥淭he binding constraint is not access to data anymore,鈥� Kunal Shah, director on the equity finance desk at RBC Capital Markets, stated.
He continued: 鈥淚t's dev resources and talent on your desk, and resources on your desk that can actually drive the development of tools and trading strategies to leverage all the data points 鈥� this is where AI can be transformative.鈥�
Sitsker concluded: 鈥淎I is like a high speed train coming at you, it鈥檚 scary, but once you jump on, you鈥檙e going the same speed as the train now. People need to jump on it.鈥�
Geopolitics presents heavy impact on financial legislation
Now more than ever, financial services legislation is being heavily impacted by the geopolitics that is going on all around the world, said Farrah Mahmood, director of regulatory affairs at the International 兔子先生Lending Association (ISLA).
Mahmood reviewed the previous year, in which an unprecedented number of elections took place globally, and which brought with it 鈥渁 significant amount of uncertainty鈥� around new policies. In 2025, the market is starting to see the implementation of these new political mandates take effect.
鈥淭here's definitely been a shift in sentiment towards more nationalist, protectionist, more inward looking policies in some of the big key jurisdictions across the globe,鈥� she continued, 鈥渨hich unfortunately is leading to a much more fragmented regulatory landscape for us.鈥�
From a trade association perspective, Mahmood emphasised how the role of organisations such as ISLA, will be even more focused on advocating for the market, ensuring there is consistency in terms of cross-border business and with regards to the key themes.
According to Mahmood, the current key themes in the market are: competitiveness and simplification; digital innovation and operational resilience; and retail.
Speaking to the market from a Canadian perspective, Laura Paglia, president and CEO of the Investment Industry Association of Canada (IIAC), agreed that the region has seen a new focus on competitiveness.
Paglia suggested that Canada has a highly fragmented regulatory system, with 13 provinces, and no national regulator. 鈥淎s Canadians, we have been highly tolerant and patient of that in the past as it results in duplication, cost, and wasted resources,鈥� she added.
This patience now seems to be waning, and so discussions which did not previously meet fruition, are being had directly.
The session entitled 鈥楻egulators & Policymakers: Global Perspectives on Shifting Views and Assumptions鈥� discussed competitiveness in respect of the US 兔子先生and Exchange Commission鈥檚 (SEC鈥檚) Regulation SHO.
Paglia asked: 鈥淲hen do we align globally and when do we not align globally?鈥� Specifically, she indicated that regulators are exploring short sales that fail to settle, without evidence of a large problem.
The Canadian Investment Regulatory Organization (CIRO) previously published a proposal suggesting there would be mandatory buy-ins on short sales in Canada, in keeping with Regulation SHO in the US. This proposal faced a number of concerns, which Paglia highlighted as she compared the core differences between the US and Canada, for example, Canada has more illiquid assets.
As a key message, Paglia said: 鈥淲e have a tendency in regulatory making to make the cost of implementation and the 鈥榟ow鈥� of implementation a consideration after the rule is made. You have got to look at that part first. And you must prove that the additional obligation that you're putting on market participants makes economic sense.鈥�
The session moved on to discuss the SEC鈥檚 10c-1a regulation, which is facing an implementation deadline in-line with Rule 13f-2.
Providing his perspective on the matter, Thomas Veneziano, head of product, Americas, at Pirum, said: 鈥淭hese two rules have been deemed by the industry as contradictory.鈥� This contradiction has led to a lawsuit brought about by a group of beneficial owners.
He explained: 鈥淚f you look at a lot of the articles that are out there, the beneficial owners may have about a 70 per cent chance of winning that case. In that scenario, you would probably see both rules go back to the SEC for some time for a revision or potentially a withdrawal.鈥�
The situation speaks to the geopolitical landscape which is seeing a pullback from the regulatory regime in the US, noted Veneziano.
While 10c-1a is set to go live on 2 January 2026, the industry is currently in the 鈥渓imbo stage鈥� in respect to this regulation.
Turning to Nancy Steiker, senior director, global securities finance product management at FIS, Mak asked how she sees 10c-1a impacting the US securities lending market.
In her concluding remarks, she said: 鈥淚t鈥檚 one sided reporting, where the lender is taking on all of the cost. How is this going to impact what they are charging for their borrows or their loans? The numbers just don't add up for the amount of modifications that go on a day, on a contract, and reportable events, and how they're going to recoup their build costs.
鈥淚f a loan is going to be a losing cost for a lender, it might actually contract liquidity in the market. It's just going to be a snowball, and the cost of borrowing is just going to get higher and higher.鈥�
Unlocking securities finance 2.0
There is a 鈥渄izzying array鈥� of options in securities finance right now, according to Steve Everett, head of business strategy and Post Trade Innovation at TMX.
Creating a discussion on the fragmentation and technology overload facing the securities finance market, Everett indicated: 鈥淎ll of the digital options, whether it be stable coins or digital assets, these various different widgets can be incredibly confusing.
鈥淭he difference between triparties and the difference with fintechs and the various offerings that they have can be somewhat overwhelming for clients.鈥�
In the final session of the day, entitled 鈥楿nlock 兔子先生Finance 2.0 Through An Integrated Digital Financial Ecosystem鈥�, market participants covered the impact of new technology andthe importance of collaboration.
Ahmed Shadmann, head of agency trading Canada and non-US equities at State Street, noted that over the last couple of years, numerous vendors have presented different kinds of solutions. From his perspective, it has been 鈥渉ard to figure out which one is value-adding and which is not鈥�.
Directing the panel, Everett asked: 鈥淲hile vendors and new technology are solving problems, do they create new ones?鈥�
Shadmann explained that while vendors do not 鈥渃ome to us with problems鈥�, further clarity is required in terms of the solution being presented. For example, how can the solution help firms from end-to-end 鈥� meaning from pre-trade to trade and then to post-trade. From a State Street perspective, the firm is looking for vendors to bring a solution that 鈥渦nderstands what we do鈥�.
While looking at the collaboration between fintechs, the industry, and market infrastructures, Barnaby Nelson, CEO of The ValueExchange, highlighted a number of current trends.
鈥淭here's an awful lot of technologies out there that claim to be a silver bullet, but ultimately, can't really be plugged in easily. Or at least raises more questions,鈥� he explained. 鈥淔or me, there are a surfeit of technology providers, but very few business providers.鈥�
Elaborating, Nelson pinpointed the importance of having someone understand balance sheet constraints for the firm, explain how the solution 鈥減lugs in鈥�, and how it will work with legacy technology, as well as with that particular firm鈥檚 risk and compliance environment.
In addition, he noted that, structurally, collaboratively owned entities are what work, and 鈥渢here鈥檚 got to be skin in the game鈥�.
From a Canadian perspective, Yvette Wu, CEO of Yield Exchange, said: 鈥淔rom a fintech point of view, we have been welcomed into the securities finance space. The benefit of this space is that it is a tight-knit community.
鈥淔or us, as a new fintech entrant, having a partnership with TMX, we鈥檙e able to come in and share and communicate what the value proposition is 鈥� and sometimes that鈥檚 the hardest part, getting in front of the user base.鈥�
Wu highlighted a second challenge for fintechs, which is change. As part of human nature, people can be 鈥渜uite uncomfortable鈥� with change.
鈥淚n this space, to get to that vision of 2.0, is to embrace this change, but we're seeing this happen already. There's a lot of momentum. There's a tonne of collaboration that's happening,鈥� she continued. 鈥淚t鈥檚 a really exciting time to be a fintech in this Canadian ecosystem.鈥�
The panel moved on to discuss the Nirvana state of securities finance 2.0, and how differently facing the global financial crisis would have been with this at hand. Kelly Mathieson, chief business development officer at Digital Asset, was instrumental during this market cycle while stationed at J.P. Morgan.
Commenting on this idea, she said: 鈥淔irstly, there is no amount of new technology or operating process around it that's going to replace humans making good business decisions or having appropriate risk assessment or just common sense. What is different, is that these technologies are going to change the way those decisions and risk activities are understood, managed and conducted in the market.鈥�
In this respect, Mathieson referred to developments such as distributed ledger technology (DLT), blockchain, and smart contracts. In addition, what would be different from a technology perspective, she added, would be the access to, and clarity on, data, which would be provided in a more real-time, continuous way.
Mathieson explained: 鈥淲e're now not only talking about data and its accessibility and clarity, but that data is now recorded in a way on a ledger that is immutable and that only exists because the parties to that data have agreed that it's accurate and will be written to the record.鈥�
Adding to the discussion, Guido Stroemer, CEO of HQLAX, analysed market adoption and what is needed for fintechs and existing infrastructure providers to work together. He indicated that the key is a good business case. Having reviewed market feedback regarding the use of blockchain technology in the collateral management space, Stroemer found that participants were more focused on a business case that could reduce settlement cycles and transfer ownership with more precision, than what technology was used.
In terms of collaboration, Stroemer said: 鈥淭here's a clear need for collaboration between fintechs and existing infrastructure providers. The key element here is that to provide value and to promote market adoption, the solutions need to be able to be implemented without a massive change to the way that existing market participants engage with the market.鈥�
Commenting on the matter, Fabrice Tomenko, head of digital trust and strategic partnerships at Clearstream, stated: 鈥淥ur goal is to minimise the impact on market participants. However, striking the right balance is challenging as we must ensure we鈥檙e still delivering value. At times, in our efforts to reduce disruption, we constrain our ability to fully leverage the potential of new, innovation-driven business models by clinging too tightly to established ways of working.鈥�
Concluding, Everett emphasised Stroemer's point on avoiding a massive change 鈥� or as Stroemer put it at the time, 鈥渂ig bang change鈥� 鈥� to how market participants engage with the market.
Everett said: 鈥淎 lot of these new infrastructure technologies, that is the conclusion at this point, it鈥檚 not going to be a big bang. When a lot of this came out, or when something new comes up, the most unhelpful word is 鈥榙isruption鈥�.
鈥淚t鈥檚 not about disruption, it鈥檚 about incremental evolution, and especially in our world, where you have to take risk and compliance with you on every step of the journey. Education is critical.鈥�
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