ISLA: strong and disciplined post-trade frameworks are of most importance
24 May 2019 London
Image: Shutterstock
The importance of strong and disciplined post-trade frameworks is in many ways as important if not more, than front-office trading and product innovation, according to Andy Dyson CEO of the International Securities Lending Association (ISLA).
In a blog post, Dyson cited: “Those of you who are close to our post-trade work will immediately recognise its importance, and how by setting best practice standards for data, lifecycle events and corporate actions, ISLA can provide consistent and robust guidelines that the industry can work within.”
He added: “Securities Financing Transactions Regulation (SFTR) and in particular, the Central Securities Depositories Regulation (CSDR) is forcing many markets to look inwardly, and critically assess whether much of what we do today is still fit for purpose in a world where there will soon be settlement failure fines and mandatory buy-ins.”
Dyson further indicated that if the industry can get the ruling around SFTR right, “this will reduce fails rates and enhance settlement flows thereby minimising the impacts of some of the most onerous elements of CSDR”.
ISLA is developing a pan-industry consensus of booking processes to overcome the challenges of SFTR and is also creating a working group, similar to the European Central Bank-led Collateral Management Harmonisation Task Force, that looks at corporate actions, of which Dyson said he hopes will “produce a series of outputs as guidance to the industry”.
Dyson also touched on how the Central Bank of Ireland is evolving to reflect the changing financial services landscape.
He said: “I’m impressed by its new supervisory framework for conduct in wholesale securities markets, the supervision of conduct within funds, and the increasingly important role of data in discharging those supervisory objectives.”
He also discussed ISLA’s inaugural meeting of a new Middle East-focused working group that has been formed in response to specific requests from member firms.
He stated: “This group will consider ways in which ISLA can help facilitate and develop domestic or regional securities lending markets in the region. We know that a vibrant and fully functioning securities lending market aids both price discovery and secondary market liquidity.”
He added: “While it is early days, the first meeting highlighted the potential need for better and more effective education in the region, and using experiences gained here in Europe to support the new and developing markets by exporting our best practice principles and legal frameworks.”
In a blog post, Dyson cited: “Those of you who are close to our post-trade work will immediately recognise its importance, and how by setting best practice standards for data, lifecycle events and corporate actions, ISLA can provide consistent and robust guidelines that the industry can work within.”
He added: “Securities Financing Transactions Regulation (SFTR) and in particular, the Central Securities Depositories Regulation (CSDR) is forcing many markets to look inwardly, and critically assess whether much of what we do today is still fit for purpose in a world where there will soon be settlement failure fines and mandatory buy-ins.”
Dyson further indicated that if the industry can get the ruling around SFTR right, “this will reduce fails rates and enhance settlement flows thereby minimising the impacts of some of the most onerous elements of CSDR”.
ISLA is developing a pan-industry consensus of booking processes to overcome the challenges of SFTR and is also creating a working group, similar to the European Central Bank-led Collateral Management Harmonisation Task Force, that looks at corporate actions, of which Dyson said he hopes will “produce a series of outputs as guidance to the industry”.
Dyson also touched on how the Central Bank of Ireland is evolving to reflect the changing financial services landscape.
He said: “I’m impressed by its new supervisory framework for conduct in wholesale securities markets, the supervision of conduct within funds, and the increasingly important role of data in discharging those supervisory objectives.”
He also discussed ISLA’s inaugural meeting of a new Middle East-focused working group that has been formed in response to specific requests from member firms.
He stated: “This group will consider ways in which ISLA can help facilitate and develop domestic or regional securities lending markets in the region. We know that a vibrant and fully functioning securities lending market aids both price discovery and secondary market liquidity.”
He added: “While it is early days, the first meeting highlighted the potential need for better and more effective education in the region, and using experiences gained here in Europe to support the new and developing markets by exporting our best practice principles and legal frameworks.”
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