CASLA: Challenges bring opportunities
31 May 2019 Toronto
Image: Shutterstock
There are many challenges in the securities lending industry but these bring opportunities, according to speaker at the Canadian Securities Lending Association (CASLA) conference.
The speaker, Robert Goobie, Healthcare of Ontario Pension Plans, explained that challenges “encourage us to think differently, and to think differently means coming up with new solutions”.
Goobie cited: "Solutions such as changes to the legal doc combining MRA and GMRA since all these functions are been centralised. We should consider other forms of credit rating not the standard S&P etc. We should take a look at Creditbenchmark.
Some of the challenges discussed by the panel included trading in different time zones. To help overcome this challenge, one panellist said that they leverage operational groups and technology, understanding the trading rules for each market, and communicating trading requirements is very important.
On the topic of technology, France Boisjoli, head of securities finance, equity market, Caisse de dépôt et placement du Québec, cited: “Two major elements that helped support growth is technology and engagement of our support teams. Technology is an essential factor in achieving efficiency.”
Boisjoli also highlighted the importance of technology and stated: “Automation has always been an integral part of our business, and I believe that if something can be automated then it should be.”
Another panellist mirrored this suggesting that to overcome challenges, “we need the contribution of technology and support teams. And today we even use technology to support legal documents”.
The panel agreed that the industry has come a long way since the financial crisis, and Boisjoli explained: “Securities lending used to be more of a “back office” business and was done with no regard for the optimization of the collateral and its composition, cross-asset trades, liquidity as well as balance sheet optimisation, legal and tax regulations, and the risk profiles of counterparties.”
Boisjoli continued: "However, the 2008 financial crisis and the regulations that came after have changed the landscape of securities lending forever."
She added: “This was complex and whilst it posed a lot of challenges it also poses a lot of opportunities. We have changed significantly over the years and thus developed our businesses as a result.”
The speaker, Robert Goobie, Healthcare of Ontario Pension Plans, explained that challenges “encourage us to think differently, and to think differently means coming up with new solutions”.
Goobie cited: "Solutions such as changes to the legal doc combining MRA and GMRA since all these functions are been centralised. We should consider other forms of credit rating not the standard S&P etc. We should take a look at Creditbenchmark.
Some of the challenges discussed by the panel included trading in different time zones. To help overcome this challenge, one panellist said that they leverage operational groups and technology, understanding the trading rules for each market, and communicating trading requirements is very important.
On the topic of technology, France Boisjoli, head of securities finance, equity market, Caisse de dépôt et placement du Québec, cited: “Two major elements that helped support growth is technology and engagement of our support teams. Technology is an essential factor in achieving efficiency.”
Boisjoli also highlighted the importance of technology and stated: “Automation has always been an integral part of our business, and I believe that if something can be automated then it should be.”
Another panellist mirrored this suggesting that to overcome challenges, “we need the contribution of technology and support teams. And today we even use technology to support legal documents”.
The panel agreed that the industry has come a long way since the financial crisis, and Boisjoli explained: “Securities lending used to be more of a “back office” business and was done with no regard for the optimization of the collateral and its composition, cross-asset trades, liquidity as well as balance sheet optimisation, legal and tax regulations, and the risk profiles of counterparties.”
Boisjoli continued: "However, the 2008 financial crisis and the regulations that came after have changed the landscape of securities lending forever."
She added: “This was complex and whilst it posed a lot of challenges it also poses a lot of opportunities. We have changed significantly over the years and thus developed our businesses as a result.”
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
