Beyond Boundaries
As we head towards our 33rd Annual Securities Finance & Collateral Management Conference in Lisbon and reflecting on market events over the last two quarters, I wanted to take a moment of your time to share a flavour of what the ISLA team has been doing since January.
Set against a backdrop of securities lending markets experiencing an unprecedented bumper year, with S&P Global Market Intelligence reporting May revenues of US$1,72bn, a 43% year-on-year increase, followed by April’s US$1.53bn and continued support from ETF and fixed income activity, geopolitical volatility, the rally in AI names, growing retail participation globally both through neo-broker lending platforms and ETFs, and heightened demand by institutional and retail investors seeking exposure to mega-IPOs, led by SpaceX and soon to be followed by Anthropic….you may well ask, in such a positive market environment, what is the role of the trade association?
For ISLA, as market dynamics change and opportunities expand, our role is to ensure the legal, regulatory and operational foundations are in place to support that growth to drive commercial opportunity for members, in a manner that is credible, efficient and resilient.
That means working in the background with you, our 282 global members in 35 jurisdictions, with regulators and policy-makers, to provide clarity, certainty, promote best practice and build structural foundations for this expanding industry to adapt with confidence.
Across regions, infrastructures and asset classes, the system is evolving beyond its traditional boundaries, and ISLA’s role is to help members shape that evolution in a practical, coordinated and fit-for-purpose way.
A Global Footprint
Our strategy this year, defined in collaboration with our Board and our members, has placed a renewed focus on strengthening cross-border engagement and deepening our global relationships. Across UK, Europe, North America, the Middle East, South Africa and Asia, ISLA continues to connect the dots across the securities finance industry, across policy agendas and regulatory regimes, convening a full breadth of perspectives, with the aim of driving harmonised outcomes and helping to prevent unintended consequences of regulatory change.
With that in mind, we have continued to build on strong collaboration with our peer associations for the benefit of the global industry. In South Africa, our engagement with SASLA highlighted both the local market’s distinct ambitions and its continued alignment with international standards. Discussions with CASLA similarly reinforced the value of regional markets maintaining a clear identity, whilst adopting global best practice and internationally recognised legal frameworks. Both emphasised the inherent value of the industry standard GMSLA and netting capabilities, which remain the bedrock of the international securities lending market.
In the Middle East, whilst we took the difficult decision to postpone our planned Saudi Arabia event in April, our commitment to the region remains unchanged. We recognise the transformative work being done by the EDAA and CMA, as well as the broader Saudi financial ecosystem. To support international market participation in the Saudi capital markets, in May, we formally established the Saudi Operations Sub-Working Group . This group, operating in conjunction with our existing Developing Markets Working Group, will serve as a dedicated forum to address the operational intricacies of the Kingdom’s market, ensuring that the infrastructure for securities financing is robust, transparent, and aligned with global best practice. Looking toward the wider MENAT region, we are continuing to work with the local exchanges in Abu Dhabi and Dubai, again aligning global best practice with regional nuances. Separately, many of you are involved in our Shari’ah lending project, which is progressing towards development of an industry standard legal agreement, unlocking new supply. In addition, at the end of June, we are looking forward to chairing a roundtable with Borsa Istanbul. This meeting will serve as a direct advocacy opportunity, allowing members to engage with the Turkish exchange, to review the current SBL regulatory framework and critically, address the impacts of the current short-selling ban.
Closer to home, we recently participated in an institutional roundtable in Madrid, focused on scaling up securities lending by Spanish UCITS, further reinforcing the recognition that securities lending is a key driver of market liquidity and efficiency, as well as an opportunity to deliver the financial inclusion policy objectives of the EU Savings & Investment Union. We now look forward to working with Inverco, the Spanish Funds Association, on developing market best practice guidance for Spanish UCITS to actively engage in securities lending.
Sharp Advocacy & The Capital Agenda
Regulatory change continues to accelerate and with that, there is need for a clear, consistent and coordinated industry voice. The launch of our Advocacy & Public Policy Working Group strengthens our ability to engage constructively with policymakers at a time when decisions taken today will shape market structure for years to come.
Over recent months, we have submitted responses to a wave of EU and UK consultations, spanning a range of topics across Crypto-Assets, Tokenised Assets, Accelerated Settlement, and the eligibility of pledged collateral for UCITS, as part of the EU’s Market Integration and Supervision Package (MISP). Our mandate remains the same: as regulators develop new rules, we must ensure the vital infrastructure of securities finance is not inadvertently hampered by unintended consequences from broad legislative sweeps. Our objective is to support regulation that strengthens resilience and market integrity, whilst preventing friction that could limit the flexibility, efficiency and competitiveness of securities finance.
Capital efficiency remains one of the most important strategic themes for members. Our recent survey highlighted continued uncertainty around regulatory and legal treatment of capital and balance sheet optimisation strategies, and we are actively advocating for harmonised outcomes which render a proportionate view on risk and capital treatment. Following publication of our Basel paper in October 2023, we will be publishing an updated paper reflecting on market developments on this topic; an update on the capital efficiency toolkit, as it is often described, including solutions which have scaled up significantly over recent months, such as the CCP clearing model and utilisation of the GMSLA pledge collateral framework.
In March, the US Federal banking agencies issued a series of notices of proposed rulemakings (NPRs) implementing the final Basel III capital standards, the Basel Endgame, which essentially constitute a rewrite of the original proposal issued in July 2023. With a comment response deadline of 18 June, we are, as we speak, working on a consensus-driven regulatory response jointly with ICMA. Our response underscores the vital importance of protecting single-netting set capital benefits. We have demonstrated to regulators that these are best achieved by layering the industry standard Cross-Product Master Netting Agreement (CPMA) over existing market standard product-specific master agreements, such as the GMSLA & GMRA supported by robust industry netting opinions. In this regard, we were pleased to publish our full suite of updated GMSLA Netting Opinions in April, covering 71 jurisdictions.
We are also working with our affiliate entity, ISLA Americas, on a consolidated comment letter in response to the NPRs, advocating for capital benefits of the pledge collateral model and similarly, for recognition of the CPMA as a qualifying master netting agreement under the Basel regime. More to come on this topic, once the comment period closes as we await final rulemaking.
Concrete Digital Standards
ISLA’s role as a practical bridge between market participants, technology innovators and regulators, will help our members shape a securities finance digital ecosystem that is robust, interoperable and commercially viable. With traditional and digital market infrastructures operating in parallel ahead of longer-term convergence, it is imperative that markets can function on the basis of core legal principles, with consistent regulatory and capital treatment.
We are looking forward to kicking off an ISLA Digital Strategy sprint spanning the second half of the year, to shape a long term approach to digital transformation for our industry, best practice and legal frameworks for DLT and tokenisation, with an analysis of opportunities and risks, defining go-forward advocacy to advance legal and regulatory harmonisation in digital markets, across topics such as settlement finality, safe custody, treatment of stablecoins, digital cash and CBDCs.
In May we published the ISLA GMSLA Digital Bonds Annex , giving members a legal base to lend natively issued digital bonds under the GMSLA; a standard legal framework to drive continued innovation in the market. An explanatory webinar produced collectively by ISLA, ICMA and Clifford Chance, is available here. This release follows the development of 2024 ISLA GMSLA Digital Assets Annex.
Connecting the Industry
The future of our industry will be shaped not only by policy, but by talent, dialogue, shared understanding and the ability to bring diverse skills into the same conversation. Over the last six months, our knowledge-building brand, ISLA Connects, has grown as a vital touchpoint for our international community. With events in London, New York, Boston and most recently, Toronto, 2026 is the year ISLA Connects went truly global.
We also brought over 150 members together for our London Briefing in May and will continue to build on this momentum through our broader programme of regional events, briefings and forums.
All Roads Lead to Lisbon
Most immediately, of course, we look forward to welcoming over 650 registered attendees to Lisbon for what promises to be our largest annual ISLA conference.
The agenda covers all strategic priorities identified by members and includes a wide range of topics, including:
- AI adoption in securities finance, implications of AI on the future workforce
- New players in the market, the continued growth of retail participation, neo-broker lending (look out for our upcoming guide on platform broker/retail lending)
- Trading desk lens on T+1 implications for liquidity (a follow up to our trader-led roundtable held in April )
- The liquidity revolution: Wallets, Tokens & global access; is 24/7 liquidity within grasp?
As the market becomes more automated, more laser-focused on capital efficiency and more interconnected, we have an opportunity not simply to adapt to change, but to work together to define it.
For more information on any of the themes covered above, feel free to reach out to the ISLA team directly:
- Farrah Mahmood – Head of Advocacy, Public Policy & Regulatory Strategy
- Adrian Dale – Head of Market Structure, Digital & RegTech
- Tina Baker– Head of Legal Services & ISLA Connects Legal
- Sejal Amin – Global Head of Events, Content & Communications
- Rishi Sethi – Director – Global Content & Communications
I look forward to seeing many of you in Lisbon and to continuing this work together in the months ahead.
Ina Budh-Raja
ISLA CEO
