Buy-side focused on 2020 regulation compliance, says ISLA
28 October 2019 London
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The CEO of the International Securities Lending Association (ISLA) has commended the buy-side community for engaging “at a very granular level” with the various regulatory requirements due to come into effect in 2020.
In ISLA’s ‘Reflections of a CEO’ newsletter, Andy Dyson said that he was struck by how buy-side attendees at the association’s recent event in Munich were cognisant of the reporting requirements of the Securities Financing Transactions Regulation (SFTR) and engaging with other securities lending industry participants to ensure they would meet the April 2020 deadline for compliance.
Dyson added: “It was also very encouraging to see clear recognition from the audience showing how the work we are doing on SFTR and the Central Securities Depositories Regulation is providing an important springboard for the future of the industry.”
Elsewhere, Dyson also noted that the Uncleared Margin Rules are increasingly on the minds of the wider buy-side community.
UMR has a deadline of 1 September 2020 for phase five firms, and a new deadline of 1 September 2021 for phase six firms, which is set to offer more time for those struggling to juggle UMR with other challenges such as the Securities Financing Transactions Regulation (SFTR).
He explained that the impact of the latest waves of these new rules, is predominantly being felt by funds and institutional investors directly rather than the earlier implementation phases which were primarily directed at banks and other prudentially regulated entities
Dyson observed that this is changing the way institutional investors are thinking about how they manage and use liquidity more broadly with securities lending increasingly seen as “a key piece of a wider liquidity and collateral puzzle”.
“As buy-side firms grapple with these new demands on their risk management infrastructures and liquidity pools the role of securities lending as a liquidity pump for much of these requirements is coming into sharper focus,” Dyson commented.
“Buy-side firms are also looking at lending in a different way today as they think about how to comply with other pieces of legislation, most notably the rolling impact of the UMRs and what this means for the management of their internal liquidity requirements”, Dyson concluded.
In ISLA’s ‘Reflections of a CEO’ newsletter, Andy Dyson said that he was struck by how buy-side attendees at the association’s recent event in Munich were cognisant of the reporting requirements of the Securities Financing Transactions Regulation (SFTR) and engaging with other securities lending industry participants to ensure they would meet the April 2020 deadline for compliance.
Dyson added: “It was also very encouraging to see clear recognition from the audience showing how the work we are doing on SFTR and the Central Securities Depositories Regulation is providing an important springboard for the future of the industry.”
Elsewhere, Dyson also noted that the Uncleared Margin Rules are increasingly on the minds of the wider buy-side community.
UMR has a deadline of 1 September 2020 for phase five firms, and a new deadline of 1 September 2021 for phase six firms, which is set to offer more time for those struggling to juggle UMR with other challenges such as the Securities Financing Transactions Regulation (SFTR).
He explained that the impact of the latest waves of these new rules, is predominantly being felt by funds and institutional investors directly rather than the earlier implementation phases which were primarily directed at banks and other prudentially regulated entities
Dyson observed that this is changing the way institutional investors are thinking about how they manage and use liquidity more broadly with securities lending increasingly seen as “a key piece of a wider liquidity and collateral puzzle”.
“As buy-side firms grapple with these new demands on their risk management infrastructures and liquidity pools the role of securities lending as a liquidity pump for much of these requirements is coming into sharper focus,” Dyson commented.
“Buy-side firms are also looking at lending in a different way today as they think about how to comply with other pieces of legislation, most notably the rolling impact of the UMRs and what this means for the management of their internal liquidity requirements”, Dyson concluded.
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