Exploring new horizons
Mirae Asset Securities (USA)

Mirae Asset Securities (USA) is building out its securities financing operation with new partnerships and an eye on growth in new markets. Robert Akeson, Richard Misiano and Peter Volino of the US senior management team explain

Now you have set out your stall in the US, what has the response been like?

Peter Volino: The response from our clients has been overwhelmingly positive. Currently, we have 112 repo counterparties and more than 81 securities lending counterparties in various stages of the approval process.

We are now executing orders off our agency desk and recently launched our prime brokerage and correspondent clearing service. Our time-to-market has been what we had expected.

Thankfully, because we are owned by South Korea’s leading financial services firm, Mirae Asset Financial Group, we have had access to all resources required to undertake and successfully complete our business launch. For example, we launched with $260 million in total net capital. We also now have 60 employees.

In addition, Mirae Asset Securities (USA) has partnered with FIS on the technology front and we are using its Securities360 platform. Securities360 is the first-of-its-kind, fully-integrated solution that automates and streamlines critical tasks from the front, middle, and back office into a single platform, and it includes portfolio accounting for our hedge fund clients. This facilitates operational efficiency and reduces risk—two big competitive advantages for our clients and ourselves. Lastly, we have chosen BNP Paribas to provide us with global custody services in the Americas, Europe and Asia. This relationship will allow us to meet the global settlement and asset servicing needs of our clients.

Have you established all the necessary clearing and CCP relationships?

Robert Akeson: Yes. In addition to being members of the Depository Trust & Clearing Corporation, Fixed Income Clearing Corporation and National Securities Clearing Corporation, we recently became members of the Options Clearing Corporation. This will also expand our reach within the world of equity finance by facilitating our ability to deal with a broader range of counterparties. Such arrangements will result in access to greater supply and balances.

Can you tell us more about your most recent move into prime brokerage?

Volino: We are targeting emerging and small hedge fund managers and proprietary traders. These clients have been most adversely affected by Basel III and the US Dodd-Frank Act and the ensuing industry consolidation. We are also working with introduced prime brokers who support smaller managers.

In addition, because of our balance sheet, we are talking with larger funds that are seeking a significant and attentive counterparty for their secondary prime brokerage relationships.

Mirae Asset Securities (USA) offers a fully-integrated prime brokerage platform capable of providing tailored solutions around portfolio reporting and analytics, risk management, and trading.

The platform focuses largely on supplying intelligent data to support our clients’ strategies. Taken as whole or in pieces, this platform offers hedge fund clients operational efficiencies and risk mitigation tools.

In addition, we can provide hedge funds with a wide range of advisory services to assist them in launching and operating their businesses, while better preparing them to meet their operational due diligence needs. These services span areas including office space, enterprise technology, cyber security, compliance and human resources, and so on.
Recently, we hired Stephen Murphy to lead our prime brokerage, correspondent clearing and agency execution businesses. Stephen has extensive sell- and buy-side experience with Weiss Multi Strategy Advisors, Neuberger Berman and Merrill Lynch.

Since you have become operational, have there been any notable milestones achieved?

Volino: We are very pleased with the rollout of our businesses to date. As previously discussed, we expected the financing businesses, repo and securities lending, to launch first, which they have. Our balances have risen significantly and are now greater than $30 billion. Both businesses continue to add counterparties. The prime brokerage and agency execution businesses have also become operational and are taking on new clients at a brisk pace.

What other markets are Mirae looking to expand into?

Richard Misiano: We intend to continue our penetration into the Canadian and European markets. This plays well to our global diversification strategy; remember the Mirae family operates in 15 country markets. In particular, we view the Canadian and European markets to represent excellent fits with our firm and business model.

Can you tell us more about the Mirae Asset Financial Group and its strategic vision?

Misiano: Mirae Asset Financial Group is South Korea’s leading financial services firm, operating in 15 country markets: South Korea, Australia, Brazil, Canada, China, Colombia, Hong Kong, India, Indonesia, Mongolia, Singapore, Taiwan, the UK, the US and Vietnam.

As of 31 December 2016, the group’s asset management business had approximately $342 billion managed assets worldwide. Its various broker-dealer subsidiaries and affiliates have approximately $5.8 billion in capital. So, we have significant and increasing global market breadth and depth.

Strategically, Mirae Asset Securities (USA) is an extension of the formidable asset management and brokerage franchise created by the parent. For example, the parent is now considering ways to enter the asset allocation business in the US with hedge funds and investment advisers. The plan is that these assets can be custodised at Mirae Asset Securities (USA), which will enhance the information flow to, and comfort level of, non-US investors.

What can Mirae Asset Securities (USA) offer its parent?

Akeson: We see the benefits comprising the following. First, as earlier noted, we have begun operations with a significant permanent capital base. This reality, combined with the fact that we do not roll up to a bank holding company, gives us tremendous added balance sheet ‘runway’ for our repo, securities lending, prime brokerage and correspondent clearing businesses. We will not be hobbled by Basel III and its ratios like other firms. Because of our globally recognised parent, our prime brokerage offering has the feel of a larger firm, but the nimbleness and attentiveness of a boutique.

Secondly, because of our parent, our clients will have access to a very distinctive foreign research product and related corporate access capabilities. We have a written content product covering a broad range of companies in South Korea, Vietnam, Indonesia and Brazil. We also have strategy pieces addressing East Asian market trends and beyond, written out of our Seoul headquarters.

Finally, as the firm enters the asset allocation business, additional synergies will emerge with our prime brokerage and financing businesses and their clients.

Interviews
The latest interviews from Securities Lending Times
Features
The latest features from Securities Lending Times
The next implementation phase of the BCBS-IOSCO margin rules is on the horizon, and the buy side could use it as a springboard for long-term gain
Between the LGPS pooling project, Brexit and changes in technology, fund managers in the UK, and their service providers, have a lot to think about
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Broadridge has finished its latest blockchain pilot, focused on bilateral repo. Horacio Barakat discusses the progress made, and where the firm will go next
Forthcoming collateral rules will require the buy-side to find trillions of dollars in additional margin, and securities financing is at the heart of many of the solutions being explored, writes BNY Mellon’s Peter Madigan
Euroclear’s Olivier Grimonpont reviews how new margin rules are forcing collateral managers to adapt, and how collaborative solutions are the answer
The securities lending industry has some much needed respite from new regulations, and the mood at this year’s RMA Conference was upbeat
Collateral managers must embrace innovation and strive for greater efficiency in processing. Jenna Lomax reports from Amsterdam
Anand Krishnan of Natixis Americas explains how regulatory pressures are changing the rules of the game and buy-side entities are changing with it
Country profiles
The latest country profiles from Securities Lending Times
Francisco Thiermann of IBM says the imminent launch of Chile’s securities lending blockchain solution will provide a shot in the arm for the market
Zubair Nizami, head of Asian securities lending trading at Brown Brothers Harriman talks to Drew Nicol about the state of the industry in the region
Asset Servicing Times

Visit our sister site
for all the latest asset servicing news and analysis

assetservicingtimes.com
Being an exciting emerging market is all well and good, but how long can that status really apply before interest wanes? India is doing its best not to find out
Hugh Leonard, director of repo sales at Australia and New Zealand Banking Group, explains how the Australian market has excelled in recent years
Securities lending is in a strong place in Australia. Dane Fannin, head of capital markets in the Asia Pacific at Northern Trust, explains the available opportunities
Federico Ortega Gilly of Mexico’s Nacional Financiera explains why his country’s securities lending market is ripe for foreign investment
Russia’s National Settlement Depository has had a busy year making its securities finance market more robust and attractive to outside investors. The CSD’s Alina Akchurina explains the innovations being implemented
South Africa’s securities lending industry is on the verge of embracing a modern T+3 settlement cycle that could boost the country’s market