Greetings,

Global securities finance revenue was up 23% in November, compared to a year earlier, with the EMEA region seeing a 31% surge. 

Here's what else we're following this week:

The European Commission proposed a plan to enhance the competitiveness of the bloc's capital markets by easing cross-border operations and strengthening the powers of the European Securities and Markets Authority (ESMA). The reform aims to steer a significant portion of the €33 trillion in private savings, currently held in low-yield accounts, toward the real economy to close the large competitiveness gap with the US. The proposals, which face resistance from some member states, would also streamline licensing for pan-European trading venues and relax limits on digital ledger technology.

The Securities and Exchange Commission plans to implement an innovation exemption for cryptocurrency companies in January 2026 as part of Project Crypto. The exemption will allow eligible firms to issue tokens without full SEC registration, providing regulatory relief through a controlled sandbox.

At a meeting of the Securities and Exchange Commission's Investor Advisory Committee, finance and crypto leaders outlined differing views on how tokenization and decentralized finance should be regulated as adoption accelerates. Panelist Samara Cohen of BlackRock noted the value of the discussion in surfacing "distinct paths and perspectives," underscoring that multiple regulatory approaches may be needed. The session took place in light of a Citadel Securities letter urging stronger oversight of DeFi for tokenized securities, which drew criticism from some crypto advocates. Executives from firms including Citadel Securities, Coinbase and Galaxy emphasized the importance of regulatory clarity but differed on how decentralized systems should fit within existing frameworks.

The Bank of England is looking for participants to help explore how the digital pound could impact existing companies who choose to integrate it alongside traditional payment methods. The BoE is currently in a "design phase" for a potential digital pound, with the aim of establishing a "clear proposition" for a UK CBDC.

Global securities finance revenue rose 23% year over year to $958 million in November, driven by global equity markets, particularly in North America and Asia-Pacific, according to EquiLend Data & Analytics. North American equity revenue climbed 14%, fueled by volatility in technology and artificial intelligence securities, while Asia-Pacific saw a 61% revenue increase.

eToro has introduced a stock lending program in the UK, allowing retail investors to earn passive income by lending fully paid stocks. The program expands eToro's partnership with BNY Mellon, which acts as custodian and clearing provider, and utilizes EquiLend to identify borrowers. This initiative aims to democratize a practice traditionally dominated by large financial institutions.

The US Commodity Futures Trading Commission has launched a pilot program allowing Bitcoin, Ether, and USDC to serve as collateral in derivatives markets, part of Acting Chair Caroline Pham's broader push to modernize digital asset oversight. The initiative, which includes new reporting requirements for futures commission merchants, rolls back older restrictions and could accelerate institutional use of tokenized collateral.

The IMF's latest report cautions that the rapid growth of dollar-based stablecoins could accelerate currency substitution and weaken domestic monetary control, especially in emerging markets. While acknowledging potential benefits for payments and financial access, the IMF highlights rising risks to financial stability. To guard against these vulnerabilities, the IMF urges globally aligned rules with robust reserve, disclosure, and redemption requirements.

Broadridge Financial Solutions' Distributed Ledger Repo platform has reported a significant increase in average daily trade volumes for repo transactions, reaching $368 billion in November for a total of $7.4 trillion. The year-over-year increase is 466%, which Broadridge attributes to the growth of tokenization activities in capital markets.

The Asia Securities Industry Financial Markets Association is urging Asian exchanges to exercise caution when transitioning to shorter settlement cycles, citing the need for significant investments to mitigate risks such as failed trades. The report highlights the complexities in Asia, including diverse currencies and operational differences, and focuses on markets including Hong Kong, Japan, and South Korea.