The International Securities Lending Association’s (ISLA) 23rd annual conference (17-19 June) in Berlin with Dealreporter as a media partner will reflect the increasingly multi-asset world of the industry, according to co-chairs Mark Barnard and Ed Oliver.
Against the backdrop of shifting regulatory sands and peaks and troughs of tradable corporate activity, financing desks are becoming multi-asset outfits increasingly “not siloed into split equity and fixed income teams,” Barnard explained.
“Industry evolution is driven by so many stakeholders that this year’s panels are structured to allow the practitioners closest to the action the freedom to have their say,” the co-chairs explained. To that end, high level moderators such as PwC partner Crispian Lord and EBRD treasurer Axel Van Nederveen will lead discussions, allowing equity liquidity chiefs, heads of global markets and even regulatory voices – those at the sharp end – to put their views across.
And the regulatory environment remains a key consideration. The EU’s Financial Transaction Tax (FTT) is “still hanging over the industry,” Oliver noted. “But the existential gloom that accompanied some participants’ take on FTT at ISLA 2013 in Prague is lessened given the details are still being negotiated one year later,” he argued.
There are certainly reasons to be optimistic in the face of the altered regulatory landscape, Barnard agreed. Some securities lending practitioners “naturally thought regulatory change would be bad,” he said. But the Basel III banking framework"is changing borrower activity that may result in opportunities for lenders who react accordingly", Oliver said.
“Firms are compliant and business is still going on,” Barnard added. But he noted “one area of debate will continue to be the impact of liquidity and leverage coverage ratios. In just one example, an exotics desk may be short and the stock borrow covering that may itself have a capital requirement on the institution undertaking the trade,” he said.
“Greater regulatory clarity on quantifying the the capital requirements underlying such trades would be welcome,” the co-chairs agreed.
With panels on “Adapting to Basel III (Wed 18 June, 10:40), “Collateral Evolution (Thurs 19 June, 09:40) and “Securities Financing Pricing (Thurs 19 June, 11:30), among others, attendees are sure to hear a range of views on how regulatory reforms are shaking up the industry – and providing opportunities for securities lenders.
"With US merger activity high and corporate action in Europe picking up - particularly for new listings in addition to capital raisings, this is a fascinating moment to take the temperature of the securities lending community," said Dealreporter's Equity Capital Markets Editor John West. "Given there are 30 live IPOs at the moment in Europe, many to cut leverage, there are tradable bonds and new stocks aplenty for holders and lenders to track," West added.
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