MiFID II is set to be a game-changer for ETFs, and will see them used in a wide variety of ways from securities lending to collateral.
The acceptance of ETFs could boost the growth of non-cash collateral.
Dealers and settlement houses seek out high quality collateral to meet demand from clients for transformation services.
Tensions could rise as pressure on obtaining high quality collateral increases, according to ESMA.
Europe's pension funds could be forced to withdraw from the OTC derivatives market if rules on variation margin are not reviewed.
The service will allow firms to automate their collateral management and comply with the impending margin regulations.
Agent lenders such as State Street and BlackRock have begun to accept ETFs as collateral.
A DTCC study suggests that collateral settlement failure costs are likely to soar when new rules come into force.
In order to raise cash fund managers will have to rely more on their clearing brokers to meet initial margin requirements.
Emily Portney left the bank on Monday to “pursue a new opportunity”, according to an internal memo.