Don’t cry wolf on the need for regulatory relief for COVID, warns ISLA CEO
16 June 2020 London
Image: lassedesignen/Shutterstock.com
The CEO of the International Securities Lending Association (ISLA) has warned market participants not to overplay their hands in pointing to the pandemic as a reason to delay incoming regulations.
Andrew Dyson says that regulators are now questioning the validity of some of the many requests for delays submitted to them in March and April, the worst period of disruption caused by the spread of COVID-19 so far.
The Securities Financing Transactions Regulation (SFTR), the Uncleared Margin Rules and Basel III were among the first regulatory frameworks to be pushed back as a result of the pandemic engulfing Europe and North America in March.
However, later delay requests based on the pandemic were rejected by regulators for the Central Securities Depositories Regulation (CSDR) and the second Shareholders Rights Directive (SRD II), which suggests that the willingness of rule-makers to rip up their implementation schedule is wearing thin.
The ISLA chief’s observations came as part of an hour-long discussion on how the securities finance market has weathered the COVID-19 pandemic so far held on the newly-launched Pierpoint Perspectives podcast hosted by Roy Zimmerhansl, practice lead and founder of Pierpoint Financial Consulting, a boutique securities finance consultancy.
Dyson explained that industry bodies, including ISLA, were right to highlight the struggles some asset servicing firms were facing in meeting SRD II’s Septemeber deadline, but that the messaging had to be clear to gain regulators’ acquiescence.
“The challenge here is that you can have delays for [good] reasons but there is also a school of thought that some of the delays that have been asked for ... are using the excuse of the pandemic,” Dyson told listeners.
“We’ve got to make sure we are not being seen as just asking for delays and using the pandemic as an excuse,” he explained, adding that any further advocacy work by ISLA must ensure it has “something new to say and have tangible reasons to support our requests”.
The pandemic has created legitimate challenges for firms, Dyson explained, but it’s vital to clearly lay out those concerns, such as around the availability of key resources, he added.
Dyson continued: “It’s absolutely key that we have our messaging sharp on this because we do run the risk of people saying we’re just using the virus.”
He concluded: “My sense from talking to some in the regulatory community in the past few weeks is that there was a sense that, certainly at the end of March and early April when there was a whole wave of people asking for delays, there was that question mark around why are they asking for that, is it a real reason or are they using the pandemic as an excuse?”
Andrew Dyson says that regulators are now questioning the validity of some of the many requests for delays submitted to them in March and April, the worst period of disruption caused by the spread of COVID-19 so far.
The Securities Financing Transactions Regulation (SFTR), the Uncleared Margin Rules and Basel III were among the first regulatory frameworks to be pushed back as a result of the pandemic engulfing Europe and North America in March.
However, later delay requests based on the pandemic were rejected by regulators for the Central Securities Depositories Regulation (CSDR) and the second Shareholders Rights Directive (SRD II), which suggests that the willingness of rule-makers to rip up their implementation schedule is wearing thin.
The ISLA chief’s observations came as part of an hour-long discussion on how the securities finance market has weathered the COVID-19 pandemic so far held on the newly-launched Pierpoint Perspectives podcast hosted by Roy Zimmerhansl, practice lead and founder of Pierpoint Financial Consulting, a boutique securities finance consultancy.
Dyson explained that industry bodies, including ISLA, were right to highlight the struggles some asset servicing firms were facing in meeting SRD II’s Septemeber deadline, but that the messaging had to be clear to gain regulators’ acquiescence.
“The challenge here is that you can have delays for [good] reasons but there is also a school of thought that some of the delays that have been asked for ... are using the excuse of the pandemic,” Dyson told listeners.
“We’ve got to make sure we are not being seen as just asking for delays and using the pandemic as an excuse,” he explained, adding that any further advocacy work by ISLA must ensure it has “something new to say and have tangible reasons to support our requests”.
The pandemic has created legitimate challenges for firms, Dyson explained, but it’s vital to clearly lay out those concerns, such as around the availability of key resources, he added.
Dyson continued: “It’s absolutely key that we have our messaging sharp on this because we do run the risk of people saying we’re just using the virus.”
He concluded: “My sense from talking to some in the regulatory community in the past few weeks is that there was a sense that, certainly at the end of March and early April when there was a whole wave of people asking for delays, there was that question mark around why are they asking for that, is it a real reason or are they using the pandemic as an excuse?”
← Previous regulation article
Access Fintech partners with Clearstream to solve CSDR penalty challenges
Access Fintech partners with Clearstream to solve CSDR penalty challenges
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
