Fidelity Dominates the High Risk Equity/Corporate Bond Repo Lender Market — J.P. Morgan is their Largest Customer, Grace Xing Hu, Jun Pan, and Jiang Wang



From “Tri-Party Repo Pricing”, Grace Xing Hu, Jun Pan, and Jiang Wang, March 5, 2019




-Mean maturity is 39.3 days

-For Fidelity’s equity repos, the median number of collateral is only 1.58

-For repos with JP Morgan, Fidelity funds charges 6.83 bps higher spreads



“In addition, we find that for equity and high-yield corporate bond repos, most of the transactions occur in the high risk segment. Moreover, the high risk segment of both markets is dominated by one fund family, Fidelity. Such a market structure makes Fidelity a systemically important player in these markets. The high segmentation in these markets further exacerbates this situation and increases the fragility of the market in terms of systemic risk”. Full Report



source: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr740.pdf
September 2015
source: https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr740.pdf
September 2015




source image: https://seeklogo.com/vector-logo/311106/fidelity-investments

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