Latin America Securities Finance Market User Guide 2020

Latin America Securities Finance User Guide 2020

JULY 2020

Executive Summary

COVID-19, the disease that knows no boundaries and does not discriminate by race, color or religion, has crippled economies across the globe and redefined the term “work from home.” Technology has stepped to the forefront to keep the wheels of progress moving, and never have Central Banks and International Monetary Organizations worked so tirelessly to provide the necessary liquidity required to keep so many businesses solvent.

Latin America, a region fighting economic headwinds even before the pandemic, is fighting its own COVID-19 surge as this guide goes to press; however, years of strong reserve management, prudent policy decisions and ample technology investments have allowed initiatives in capital markets to move forward. This was never more evidenced than by the amount of sovereign debt that came to market and was sold in the months after the pandemic broke in March. Mexico and Peru alone issued over $9 trillion in debt, providing not only needed liquidity but, maybe more importantly, the confidence of offshore investors.

EquiLend and RMA are proud to publish the 2020 edition of our successful Latin America Securities Finance User Guide. Our partners across the region did a great job building off last year’s inaugural publication, providing increased depth on both the equity and fixed income markets. In addition to Argentina, Brazil, Chile, Mexico and Peru. the major addition for this year is the section on Colombia, which was not included in 2019. Our regional partners recognized the need to adapt and made the necessary regulatory, legal and technology changes that will allow foreign investors to access the full breath of capital markets strategies that would require the ability to borrow, lend or finance Colombian equities.

Perhaps the most notable headline in the region is from Mexico, which at the end of 2019 enacted regulatory changes aimed at increasing liquidity in the equity markets in what is viewed as a first step toward a true cross-border securities lending product. With the increases in sovereign debt issuance we mentioned above, Mexico has seen an increase in the need to provide financing for those holdings. In 2019-20, significant progress has also been made in obtaining local currency financing for both sovereign and corporate debt issuance. Many other exciting developments have taken place across the region—please read on to learn more about them.

Finally, we offer our sincere gratitude to the many individuals and firms who contributed their expertise to this guide. In particular, we want to thank Jill Rathgeber, BNY Mellon; Billy Ochoa, Santander; the Bolsa de Valores de Lima and Cititrust Colombia. Without their help this user guide would not have been possible.

Please enjoy the Latin America Securities Finance User Guide 2020. If you have comments or suggestions, please feel free to share them with us. We look forward to our continued work alongside the banks, brokers and exchanges in Latin America to support the growth of the regional securities finance markets.

+1 (212) 901 2217

Director, Securities Lending and Global Markets Risk
+1 (215) 446-4122

Who We Are

EquiLend is a global financial technology firm offering trading, post-trade, market data, regulatory and clearing services for the securities finance, collateral and swaps industries. EquiLend has offices in New York, Boston, Toronto, London, Dublin, Hong Kong and Tokyo.

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