Retail continued to build momentum this quarter, even where the frameworks around it are still catching up. Across markets, we’re seeing a mix of innovation and growing pains, as regulators, lenders and borrowers adjust to a new reality. Here’s what stood out to me.

E4E (US): Narrow Scope

Equity-for-equity relief (allowing equities as collateral when borrowing equities under the Customer Protection Rule) is beginning to draw attention in the US, but remains firmly in “uncharted” territory. The underlying order, effective March 2026, is narrowly defined to cater to institutional lenders (including QIBs). This means fully paid retail-facing loans remain outside of its reach for now, which makes E4E a promising development ripe for revision, rather than a broader market shift.

ISLA Takeaways: Retail Goes Structural

This year’s ISLA conference struck a noticeably different tone – retail is no longer a “what if” but a permanent strategic element of the supply base. Demand keeps concentrating where it counts (hard-to-borrow names, small caps, tight floats), yet getting that inventory to market is still hard work. Consent, collateral allocation, recalls, reporting, segregation – these have moved from theoretical questions to live operational and regulatory demands, with technology now critical to meeting them. At the same time, counterparties are still grappling with how to set risk parameters for a supply source that doesn’t fit the traditional institutional mould. So retail is here to stay, but the market has yet to build around it.

Germany: Quiet Reform

With Germany’s PFOF exemption having expired in June, retail securities lending is a natural contender as a long-term revenue source for German brokers. The local custody law (Depotgesetz) is equally relevant here for retail flows – and especially after its quiet but meaningful amendment in 2025, to allow consent to lending in electronic form (part of wider bureaucracy reforms). While Depotgesetz remains unclear as to how frequently client consent should be sought, the broader ESMA guidelines suggest the direction is the quality (not the frequency) of that consent. It needs to be express, informed and clearly given – a standard that matters most for retail, rather than institutional clients.

Pledge GMSLA: Gaining Traction

The 2018 Pledge GMSLA is gaining momentum as an alternative to the title-transfer 2010 version. As Basel 3.1 pushes more counterparties onto standardised capital treatment across the UK and EU, the Pledge looks more attractive, as an option to ease pressure on capital metrics such as RWAs. While adoption among institutional counterparties is already mainstream, we’re also seeing traction in the retail-facing space, where the pace depends particularly on operational readiness to support it, and interest there is genuine and growing.

This commentary reflects general views and does not constitute legal or other type of advice. Regulatory interpretations may evolve, and readers should seek their own professional advice before relying on or acting on this content.