Isma research shows growth in electronic repo trading

Isma research shows growth in electronic repo trading

The International Securities Market Association's (Isma) latest research into the European repo markets shows that the share of electronic trading increased to 20% of the total value of outstanding contracts for the six months ending December 2003.

The majority of the financial institution participants of Isma's semi-annual survey are now using electronic systems for some part of their repo business.

The survey also shows an increase in the amount of business settled through tri-party repo arrangements - where a third-party custodian manages cash and collateral accounts for counterparties - which rose from 6.2% to 11% in the six month period.

Analysis of the underlying data from the banks that took part in the research indicates that the European repo market as a whole grew by over 22% in 2003, with most of the growth occurring in the first half of the year. Isma says the slowdown in the second half reflected difficult trading conditions in the bond markets generally.

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