From access to outcomes: APAC securities finance rewired
11 March 2026
Nehal Mehra, head of Securities Finance and Global Collateral, Asia Pacific, at BNY, outlines how institutional investors across the region are moving beyond market access to configure lending programmes that deliver income, liquidity, and funding resilience
Image: stock.adobe.com/Bolbik
Securities finance in Asia Pacific is now a multi-asset discipline delivering institutional outcomes — income, liquidity, funding, and resilience — across diverse regulatory and market structures. Regional dynamics — including regulatory nuance, collateral practices, and cross-border flows — shape how supply meets demand across mature markets like Japan and Australia, regulatory-led locations like Taiwan and Korea, and fast-evolving ecosystems in Southeast Asia.
Institutional stakeholders are asking more of their lending programmes. Asset owners and sovereigns seek risk aware income aligned to governance and ESG priorities, with greater control over collateral, counterparties, and term. Pension and mutual funds want flexible structures that adapt to cycles, optimise balance sheets, and support funding and liquidity. Borrowers — from hedge funds to banks to asset managers — prioritise resilient access to borrow a broader range of securities, diversified liquidity sources, efficient pricing, and operational, technology-led agility as regulation and market microstructure continue to evolve.
A securities financing platform offering principal and agency lending capabilities provides a holistic set of integrated solutions. In an agency lending model, clients define the policies and a third-party agent executes the programme — optimising borrower demands, collateral management, settlement, and reporting — combining scalability with strong governance and a client-centric approach. Diversified counterparty exposure across a broad, vetted borrower universe reduces concentration risk and enhances price discovery. Principal lending offers an alternative channel for selective, balance sheet-driven trades, creating compatibility in meeting clients’ needs across both models.
As securities lending matures from a tactical capability to a strategic lever, institutions seek solutions that are fully client aligned, resilient, and capable of solving near and longer-term challenges both specific to APAC and globally. BNY’s end-to-end securities financing model includes agency and principal lending and is grounded in scale, governance, and local insight, adapting to each client’s needs to deliver operational efficiency and strategic impact.
The rise of agency lending in APAC
In 2025, revenue generated by securities lending markets globally rose 27 per cent to US$14.9 billion, while revenue in the Asia Pacific region jumped 54 per cent to US$3.3 billion. This growth in lendable assets is continuing in 2026, with BNY’s on-loan balances more than doubling in a number of APAC fixed income and equity markets during 2025.
“At BNY, we’re seeing a clear rise in our on-loan inventory and new opportunities across our principal and agency lending businesses that mirrors the strong growth in demand for APAC assets. We’re investing in new capabilities and partnerships to meet that momentum,” comments Nehal Mehra, head of Securities Financing and Global Collateral for Asia Pacific at BNY.
“On the agency side, clients across the region want to participate in lending programmes, often as a means to deliver competitive outperformance for their customers. We connect them to a broad community of creditworthy borrowers, enabling them to monetise their asset pool in a risk-aligned, operationally scalable manner.”
Agency lending programmes offer tailored programme design, transparent reporting, and diversified borrower access. Loaned securities comprise global equities and government, sovereign, supranational, and corporate bonds. Eligible collateral includes cash and high-quality non-cash securities — such as equity index baskets, ETFs, and government bonds. Solutions extend to include directed, indemnified and non-indemnified loans, asset segregation, contingent cash raising, and alignment of cash collateral investment choices aligned to the client’s risk tolerance and investment policies.
BNY’s agency lending programme is the largest globally, with US$6.1 trillion in lendable assets and on-loan levels of US$695 billion at 2025 year-end. With lending in 34 local markets across six global trading desks — including Hong Kong and Singapore — solutions are tuned to local and global client and borrower requirements and are calibrated for local market regulatory specifications.
Within this framework, BNY provides interactive reporting tools that enhance transparency, underpinned by advanced credit, market, and operational risk controls. These capabilities harness innovative technology for trade management and optimisation for a broad range of institutional investors — from public asset owners and pension funds to mutual funds, sovereigns, and hedge funds — within a trusted partnership model that keeps programmes disciplined and measurable.
Investing in third-party lending
In third-party lending, the client appoints a lending agent independent of their custodian, selecting best-in-class specialist providers by capability. Operational risk-managed third-party programmes deliver lending services without the embedded requirement (and costs) to appoint a new custodian. But they require investment in technology, automation, and a partnership between lending agent and custodian, especially relevant for no-fail markets prevalent in Asia. BNY is investing in these capabilities, driving growth in lendable assets. Operational best practices, global scale, and tech innovation are driving adoption of third-party lending programmes that pair custodians and lenders to meet shared client needs.
Translating evolving needs into practical, measurable solutions
For APAC institutions seeking to use agency lending for incremental revenue generation, liquidity, funding, and portfolio resilience, the priorities are clear: configurable mandates, granular transparency, and cross-border resilience. A robust agency programme balances risk, return, income, liquidity, and fiduciary oversight — adapting global agency models to local rules with clear collateral policies, selective counterparties, dynamic term/fee optimisation, and transparent reporting. Flexibility of programme parameters and lending models is key.
But institutions also want a securities finance partner who understands their whole business — in-region and globally where needed. BNY approaches clients holistically, looking first and foremost to understand their goals, and recognising the importance of offering not just individual products, but a single port of call for unlocking securities financing opportunities across coordinated touchpoints. They want a partner who supports innovation, navigates regulatory change, invests in the technologies of the future, and leans into market evolution. BNY’s synthetic agency finance solution, a swap-based lending and financing product, expands the toolkit for agent lenders and clients to increase utilisation and monetise supply-demand and regulatory dislocations.
Stepping beyond agency
As agency programmes scale across APAC and broaden supply, principal lending adds depth and immediacy — providing continuous market-making and balance sheet intermediation when size, timing, or market conditions demand it. Where agency optimises utilisation and client outcomes, principal activity ensures liquidity is available to meet borrower demands and helps stabilise spreads during episodic stress.
To anchor funding stability, BNY provides access to sponsored FICC clearing — converting bilateral variability into centrally margined, predictable liquidity. Facing the clearing house enables multilateral netting, reducing balance sheet drag relative to bilateral networks, while standardised margining and settlement processes dampen idiosyncratic shocks and curb fails, particularly during rate volatility or quarter-end constraints. Cleared repo delivers US Treasury market resiliency. BNY’s sponsored member programme enables clients to meet regulatory obligations and/or navigate flows to liquidity centres. For APAC based clients, education and region agnostic execution are critical to meeting mandated deadlines. Integration with agency services enables clients to raise liquidity or to reinvest via a stable, credit mitigated channel.
Complementing sponsored cleared repo, BNY’s secured loan offering delivers customised, principal-based financing — with term certainty, broader collateral coverage, and structuring tailored to portfolio needs across cycles. Used together, cleared repo provides scalable day-to-day liquidity and collateral optimisation, while secured loans extend strategic financing against a wider range of assets. The result is diversified funding, more efficient collateral usage, and stronger balance sheet resilience — kept within disciplined governance and measurable programme outcomes.
Partnership and communication
Translating strategy into daily results requires a disciplined partnership model. Whether agency or principal, a well-run lending programme provides named points of contact who coordinate day-to-day operations, governance reporting, and periodic reviews in partnership with regional and global trading desks. The emphasis should be on consistent dialogue, timely issue resolution, and proactive adjustments to local market changes — keeping the programme aligned to policy and delivering measurable outcomes. Firms like BNY offer this partnership model, combining steady communication with local market insight to keep parameters calibrated to the client’s mandate.
Looking ahead in APAC securities finance: Outcomes and innovation
APAC securities finance is moving from access to outcomes — income, liquidity, funding, and portfolio resilience — delivered through configurable programmes that are measurable, governed, and tuned to local market practice. The most effective models pair agency execution with selective principal capabilities, adapting to regulatory and market context, and allowing institutions to calibrate collateral and counterparties, access diversified borrower liquidity, and use cleared pathways where appropriate, all within disciplined governance.
BNY will continue to invest in technology, operating models, and risk management to expand lending pools and enhance market coverage across APAC and globally. For APAC securities financing, the way ahead is coordinated and pragmatic: tune programmes to the mandate, leverage agency principal where it serves, and anchor on performance and risk.
Institutional stakeholders are asking more of their lending programmes. Asset owners and sovereigns seek risk aware income aligned to governance and ESG priorities, with greater control over collateral, counterparties, and term. Pension and mutual funds want flexible structures that adapt to cycles, optimise balance sheets, and support funding and liquidity. Borrowers — from hedge funds to banks to asset managers — prioritise resilient access to borrow a broader range of securities, diversified liquidity sources, efficient pricing, and operational, technology-led agility as regulation and market microstructure continue to evolve.
A securities financing platform offering principal and agency lending capabilities provides a holistic set of integrated solutions. In an agency lending model, clients define the policies and a third-party agent executes the programme — optimising borrower demands, collateral management, settlement, and reporting — combining scalability with strong governance and a client-centric approach. Diversified counterparty exposure across a broad, vetted borrower universe reduces concentration risk and enhances price discovery. Principal lending offers an alternative channel for selective, balance sheet-driven trades, creating compatibility in meeting clients’ needs across both models.
As securities lending matures from a tactical capability to a strategic lever, institutions seek solutions that are fully client aligned, resilient, and capable of solving near and longer-term challenges both specific to APAC and globally. BNY’s end-to-end securities financing model includes agency and principal lending and is grounded in scale, governance, and local insight, adapting to each client’s needs to deliver operational efficiency and strategic impact.
The rise of agency lending in APAC
In 2025, revenue generated by securities lending markets globally rose 27 per cent to US$14.9 billion, while revenue in the Asia Pacific region jumped 54 per cent to US$3.3 billion. This growth in lendable assets is continuing in 2026, with BNY’s on-loan balances more than doubling in a number of APAC fixed income and equity markets during 2025.
“At BNY, we’re seeing a clear rise in our on-loan inventory and new opportunities across our principal and agency lending businesses that mirrors the strong growth in demand for APAC assets. We’re investing in new capabilities and partnerships to meet that momentum,” comments Nehal Mehra, head of Securities Financing and Global Collateral for Asia Pacific at BNY.
“On the agency side, clients across the region want to participate in lending programmes, often as a means to deliver competitive outperformance for their customers. We connect them to a broad community of creditworthy borrowers, enabling them to monetise their asset pool in a risk-aligned, operationally scalable manner.”
Agency lending programmes offer tailored programme design, transparent reporting, and diversified borrower access. Loaned securities comprise global equities and government, sovereign, supranational, and corporate bonds. Eligible collateral includes cash and high-quality non-cash securities — such as equity index baskets, ETFs, and government bonds. Solutions extend to include directed, indemnified and non-indemnified loans, asset segregation, contingent cash raising, and alignment of cash collateral investment choices aligned to the client’s risk tolerance and investment policies.
BNY’s agency lending programme is the largest globally, with US$6.1 trillion in lendable assets and on-loan levels of US$695 billion at 2025 year-end. With lending in 34 local markets across six global trading desks — including Hong Kong and Singapore — solutions are tuned to local and global client and borrower requirements and are calibrated for local market regulatory specifications.
Within this framework, BNY provides interactive reporting tools that enhance transparency, underpinned by advanced credit, market, and operational risk controls. These capabilities harness innovative technology for trade management and optimisation for a broad range of institutional investors — from public asset owners and pension funds to mutual funds, sovereigns, and hedge funds — within a trusted partnership model that keeps programmes disciplined and measurable.
Investing in third-party lending
In third-party lending, the client appoints a lending agent independent of their custodian, selecting best-in-class specialist providers by capability. Operational risk-managed third-party programmes deliver lending services without the embedded requirement (and costs) to appoint a new custodian. But they require investment in technology, automation, and a partnership between lending agent and custodian, especially relevant for no-fail markets prevalent in Asia. BNY is investing in these capabilities, driving growth in lendable assets. Operational best practices, global scale, and tech innovation are driving adoption of third-party lending programmes that pair custodians and lenders to meet shared client needs.
Translating evolving needs into practical, measurable solutions
For APAC institutions seeking to use agency lending for incremental revenue generation, liquidity, funding, and portfolio resilience, the priorities are clear: configurable mandates, granular transparency, and cross-border resilience. A robust agency programme balances risk, return, income, liquidity, and fiduciary oversight — adapting global agency models to local rules with clear collateral policies, selective counterparties, dynamic term/fee optimisation, and transparent reporting. Flexibility of programme parameters and lending models is key.
But institutions also want a securities finance partner who understands their whole business — in-region and globally where needed. BNY approaches clients holistically, looking first and foremost to understand their goals, and recognising the importance of offering not just individual products, but a single port of call for unlocking securities financing opportunities across coordinated touchpoints. They want a partner who supports innovation, navigates regulatory change, invests in the technologies of the future, and leans into market evolution. BNY’s synthetic agency finance solution, a swap-based lending and financing product, expands the toolkit for agent lenders and clients to increase utilisation and monetise supply-demand and regulatory dislocations.
Stepping beyond agency
As agency programmes scale across APAC and broaden supply, principal lending adds depth and immediacy — providing continuous market-making and balance sheet intermediation when size, timing, or market conditions demand it. Where agency optimises utilisation and client outcomes, principal activity ensures liquidity is available to meet borrower demands and helps stabilise spreads during episodic stress.
To anchor funding stability, BNY provides access to sponsored FICC clearing — converting bilateral variability into centrally margined, predictable liquidity. Facing the clearing house enables multilateral netting, reducing balance sheet drag relative to bilateral networks, while standardised margining and settlement processes dampen idiosyncratic shocks and curb fails, particularly during rate volatility or quarter-end constraints. Cleared repo delivers US Treasury market resiliency. BNY’s sponsored member programme enables clients to meet regulatory obligations and/or navigate flows to liquidity centres. For APAC based clients, education and region agnostic execution are critical to meeting mandated deadlines. Integration with agency services enables clients to raise liquidity or to reinvest via a stable, credit mitigated channel.
Complementing sponsored cleared repo, BNY’s secured loan offering delivers customised, principal-based financing — with term certainty, broader collateral coverage, and structuring tailored to portfolio needs across cycles. Used together, cleared repo provides scalable day-to-day liquidity and collateral optimisation, while secured loans extend strategic financing against a wider range of assets. The result is diversified funding, more efficient collateral usage, and stronger balance sheet resilience — kept within disciplined governance and measurable programme outcomes.
Partnership and communication
Translating strategy into daily results requires a disciplined partnership model. Whether agency or principal, a well-run lending programme provides named points of contact who coordinate day-to-day operations, governance reporting, and periodic reviews in partnership with regional and global trading desks. The emphasis should be on consistent dialogue, timely issue resolution, and proactive adjustments to local market changes — keeping the programme aligned to policy and delivering measurable outcomes. Firms like BNY offer this partnership model, combining steady communication with local market insight to keep parameters calibrated to the client’s mandate.
Looking ahead in APAC securities finance: Outcomes and innovation
APAC securities finance is moving from access to outcomes — income, liquidity, funding, and portfolio resilience — delivered through configurable programmes that are measurable, governed, and tuned to local market practice. The most effective models pair agency execution with selective principal capabilities, adapting to regulatory and market context, and allowing institutions to calibrate collateral and counterparties, access diversified borrower liquidity, and use cleared pathways where appropriate, all within disciplined governance.
BNY will continue to invest in technology, operating models, and risk management to expand lending pools and enhance market coverage across APAC and globally. For APAC securities financing, the way ahead is coordinated and pragmatic: tune programmes to the mandate, leverage agency principal where it serves, and anchor on performance and risk.
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