Securities finance industry reacts to Brexit
24 June 2016 London
Image: Shutterstock
Securities finance industry associations and market participants offer their reactions to the UK’s decision to leave the EU by 51.9 percent by stressing the need for calm and emphasising that change will happen gradually.
International Securities Lending Association:
“This result [UK’s EU referendum] is a momentous decision that will have significant implications for financial markets. However, it is important to stress that the UK vote to leave the EU will not have any immediate impact on the legal certainty of existing transactions undertaken under the global master securities lending agreement (GMSLA), nor will it require any immediate contractual changes from counterparties.”
“The process to leave the EU will take at least two years and during that time we will be working with all of you and our respective legal partners to better understand the challenges that our market will face during that process. During that time I would remind you that all existing European treaties, directives and regulations will remain in force.”
FIS Astec Analytics:
“Short interest in both FTSE 100 shares and indeed the wider UK equities market has been decreasing over the days leading up to the referendum. At the end of the last trading day before the voting commenced, short interest in FTSE 100 shares increased by 1.2 percent, giving a slightly more negative view of expectations for share prices come Friday.”
“However, the total number of FTSE 100 shares sold short remains just below the levels seen last Friday, (17 June) and at the close of business on Wednesday UK equities overall remained flat, in terms of the value shorted, compared with the day before, suggesting that there was no burst of shorting activity ahead of the vote.”
“Overall, not unlike the currency markets, short sellers seem to have been betting on the Remain result. Focus is now shifting to other European markets and their reaction to the UK vote.”
International Capital Markets Authority:
“ICMA will work actively with all its members, large and small, sell side and buy side, through its Market Practice and Regulatory Policy Committees, regional committees and other working groups, as appropriate, to help them prepare for the international capital market implications of Brexit.”
“ICMA’s mission continues to be the promotion of resilient and well-functioning international capital markets. ICMA provides standard market documentation and guidance on market practices, which are widely adopted in many areas of the international capital markets.”
“They may potentially need adjustment as the details of the UK’s withdrawal from the EU become clearer. ICMA will continue to review its standard market documentation and guidance in the light of future developments and will ensure they are amended as and when needed in consultation with our members.”
“As the markets adapt to the UK withdrawal from the EU, ICMA will continue to work with the authorities in the UK, the EU, the euro area and elsewhere, to ensure that our members’ views in the international capital markets are well represented.”
Deutsche Börse and the London Stock Exchange:
“Both boards believe that the outcome of the referendum does not impact the compelling strategic rationale of the Merger. The Boards further believe that the Combined Group’s capabilities, including global reach, distribution network across Europe, Asia and America, brand strength, financial resources and deep customer relationships, remain well positioned to serve global customers irrespective of the result of the referendum.”
International Securities Lending Association:
“This result [UK’s EU referendum] is a momentous decision that will have significant implications for financial markets. However, it is important to stress that the UK vote to leave the EU will not have any immediate impact on the legal certainty of existing transactions undertaken under the global master securities lending agreement (GMSLA), nor will it require any immediate contractual changes from counterparties.”
“The process to leave the EU will take at least two years and during that time we will be working with all of you and our respective legal partners to better understand the challenges that our market will face during that process. During that time I would remind you that all existing European treaties, directives and regulations will remain in force.”
FIS Astec Analytics:
“Short interest in both FTSE 100 shares and indeed the wider UK equities market has been decreasing over the days leading up to the referendum. At the end of the last trading day before the voting commenced, short interest in FTSE 100 shares increased by 1.2 percent, giving a slightly more negative view of expectations for share prices come Friday.”
“However, the total number of FTSE 100 shares sold short remains just below the levels seen last Friday, (17 June) and at the close of business on Wednesday UK equities overall remained flat, in terms of the value shorted, compared with the day before, suggesting that there was no burst of shorting activity ahead of the vote.”
“Overall, not unlike the currency markets, short sellers seem to have been betting on the Remain result. Focus is now shifting to other European markets and their reaction to the UK vote.”
International Capital Markets Authority:
“ICMA will work actively with all its members, large and small, sell side and buy side, through its Market Practice and Regulatory Policy Committees, regional committees and other working groups, as appropriate, to help them prepare for the international capital market implications of Brexit.”
“ICMA’s mission continues to be the promotion of resilient and well-functioning international capital markets. ICMA provides standard market documentation and guidance on market practices, which are widely adopted in many areas of the international capital markets.”
“They may potentially need adjustment as the details of the UK’s withdrawal from the EU become clearer. ICMA will continue to review its standard market documentation and guidance in the light of future developments and will ensure they are amended as and when needed in consultation with our members.”
“As the markets adapt to the UK withdrawal from the EU, ICMA will continue to work with the authorities in the UK, the EU, the euro area and elsewhere, to ensure that our members’ views in the international capital markets are well represented.”
Deutsche Börse and the London Stock Exchange:
“Both boards believe that the outcome of the referendum does not impact the compelling strategic rationale of the Merger. The Boards further believe that the Combined Group’s capabilities, including global reach, distribution network across Europe, Asia and America, brand strength, financial resources and deep customer relationships, remain well positioned to serve global customers irrespective of the result of the referendum.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
