ICSF Update

COVID-19 | Policy Workshop | Women in Securities Finance Partnership

I hope you all had a relaxing Easter break and stayed safe in these extraordinary times.

You may recall that I opened this new segment in the ISLA blog in March, by updating you on the ICSF’s progress, our Principles for Sustainable Securities Lending (PSSL), and by affirming this Council’s commitment to broadening our member base beyond beneficial owners. Since then, the COVID-19 pandemic has swept the globe and caused a downturn in financial markets. As a climate like this holds significant ramifications for our sector, the ICSF published its position paper, Making Sense of Sustainable Securities Lending & Short Selling During the COVID-19 Crisis last week to assert our belief that sustainable securities lending plays a vital role in maintaining market liquidity and stability. We also stressed that an inconsistent approach by global regulators to short selling bans was counterproductive, and that further positive guidance on best practice was required.

Many organisations have had to significantly adjust their business plans in response to the current situation. This is understandable as few businesses would have modelled for this crisis. However, the ICSF feels that the PSSL need to be at the forefront of the sustainable finance debate, and we will therefore publish a second position paper by early May. This paper will demonstrate how positive engagement between the securities lending sector and regulators can result in guidance that is more fit for purpose and practicable in situations like this. We will also suggest requirements for drafting such guidance and how we would hope to work with regulators throughout. We are also planning a third position paper on global sustainable finance themes, in collaboration with our Partners by early July, and will respond to the EU consultation on sustainable finance by 15 July.

On 25 March,  I hosted a policy workshop of the Council Executive. The key points from this session were as follows:
• In response to growing interest in ICSF membership by smaller organisations, we will do more research on their expectations in relation to collaborating with us.
• Word of mouth is a powerful way of spreading our message, and ICSF partners will be encouraged to engage with, and introduce, potential ICSF members.
• To explore the benefits of broadening the ICSF member base beyond beneficial owners, I will host a series of webinars, jointly with Andrew Dyson, between April and June to engage with stakeholders on both the supply and demand side of the securities lending market.
• To accommodate movements caused by COVID-19, publication of the ICSF Annual Report has been re-scheduled from June to September 2020. This will provide a reflection on the Council’s first year, clarify the PSSL (and what progress members have made in implementing them), and look into the current regulation of key financial regions.

I am also delighted to welcome the London chapter of Women in Securities Finance (WISF) as ICSF Partners. WISF connects, encourages, and empowers women from throughout the securities finance industry – fostering diversity and offering its members support and recognition.

Finally, our next two quarterly meetings have been pencilled in for May/June and again in September. For the time being, I wish you a safe and pleasant spring.

Radek Stech
Chair of the ISLA Council for Sustainable Finance

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