The future’s bright, say securities lending panellists
06 December 2017 London
Image: Shutterstock
“The beneficial owner discussion is tending toward a more revenue-driven narrative as we look at how securities lending evolves for that side of the supply chain”, according to Simon Lee, managing director at eSecLending, speaking at the Global Custody Forum in London.
In a panel at the conference, when asked to give a simple yes-or-no response as to whether the future of securities lending remains positive, speakers responded with a unanimous “yes”.
Lee commented that one of the reasons to be happy, post-crisis, is that “clients now have a better understanding of revenue dynamics”.
He added: “On the borrower side, there is more discussion about managing regulatory costs, and how that will affect how businesses look in the future.”
Where technology is concerned, Stefan Kaiser, managing director of Blackrock, suggested that, for the future success of securities lending, technology needs to be made “seamless” for clients.
He added: “It’s logical to manage all risk in house. Where indexing is concerned, it’s helpful to have a good relationship between portfolio management and the company’s securities lending group.”
Another panellist, Maurice Leo, director of agency securities lending at Deutsche Bank, added that $9.2 billion was generated in revenue through securities lending, globally, in 2016—the strongest result for five years.
However, despite the overall positivity, Lee did say that he did have concerns about some small beneficial owners being put off by the increased regulatory costs of indemnification and the Securities Financing Transactions Regulation reporting regime.
In a panel at the conference, when asked to give a simple yes-or-no response as to whether the future of securities lending remains positive, speakers responded with a unanimous “yes”.
Lee commented that one of the reasons to be happy, post-crisis, is that “clients now have a better understanding of revenue dynamics”.
He added: “On the borrower side, there is more discussion about managing regulatory costs, and how that will affect how businesses look in the future.”
Where technology is concerned, Stefan Kaiser, managing director of Blackrock, suggested that, for the future success of securities lending, technology needs to be made “seamless” for clients.
He added: “It’s logical to manage all risk in house. Where indexing is concerned, it’s helpful to have a good relationship between portfolio management and the company’s securities lending group.”
Another panellist, Maurice Leo, director of agency securities lending at Deutsche Bank, added that $9.2 billion was generated in revenue through securities lending, globally, in 2016—the strongest result for five years.
However, despite the overall positivity, Lee did say that he did have concerns about some small beneficial owners being put off by the increased regulatory costs of indemnification and the Securities Financing Transactions Regulation reporting regime.
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