This year we also find ourselves tussling with geopolitical fall-out on an almost daily basis...
June is an important month for ISLA, as it not only marks the final stages of planning for the next iteration of our Annual Securities Finance & Collateral Management Conference, but it also signals the half way point of the year, and therefore, the moment where I put pen to pad to reflect on the year so far.
Each year I comment on the speed of change across our industry, from regulation and technology, to market infrastructure, and much more. While 2025 is no different, this year we also find ourselves tussling with geopolitical fall-out on an almost daily basis. With so much change, the shelf life of blogs such as this, only ever seem to decrease!
I want to first reflect on ISLA’s work over the last six months. There have been many highlights, from hosting a hugely successful joint association conference in Riyadh, to the continued growth of our ISLA Connects brand via further educational briefings. Events such as these prove just how valuable networks are to our industry, and the role that we play in providing the platform for these networks to form. It is great to see this value being recognised through the continued growth of our membership (with 12 member firms coming on board in the first half, and with many more in the pipeline).
On the advocacy front, ISLA has been extremely active in the EU, engaging policy makers on a myriad of topics, namely T+1, Basel and the Savings and Investment Union (SIU). Through various meetings at the Eurofi conference and in Brussels, what has struck me the most is the general recognition that for the SIU to succeed, there needs to be a fundamental reform across Europe, and for Financial Services, this focusses on a number of key themes. Firstly, capital markets need to be strengthened in member states to help drive the creation and demand for assets through products such as pensions. With this demand comes the requirement for a more efficient and resilient post trade ecosystem, however with nearly 280 trading venues and 31 CSDs, this is no small task. The market needs best practice, standards, and ultimately collaboration.
Taking a broader view of our market, it’s clear we are in a constant state of evolution. At the heart of this is regulation which directly and indirectly impacts almost every strategic decision we make. Earlier this year ‘de-regulation’ was the buzzword however, now ‘competitiveness’ leads the charge, bringing with it new reforms, policies, and regulations. Central to this is T+1 which will undoubtedly be one of the defining topics for the European markets over the coming years. While much great work has already been achieved by the EU and UK Taskforces, uncertainty still remains on the practical implementation, especially when we consider the fragmented nature of the EU markets.
Alongside T+1, the industry waits with bated breath on the direction of travel of Basel III. In the US, focus on tariffs, immigration and ongoing global conflicts has meant the long-spouted talk of mass de-regulation, is yet to materialise. Without any certainty, progress has stalled elsewhere with few nations unwilling to play their cards too early for risk of falling victim of first mover disadvantage. With the Federal Reserve’s new financial supervision chief, Michelle Bowman, recently promising to remove outdated or overly burdensome regulations, we expect an increase in activity in the latter half of the year and members wishing to stay abreast of the latest developments are invited to join our Regulatory Steering Group.
One area we are seeing progress is in Spain (quite timely and opportune given we will be heading there next week!). After many years of restricted activity, we could be on the cusp of the market opening up. With increased liquidity and new supply, Spain’s capital markets could soon become a major player, and in turn, key to the EU competitiveness agenda. These developments, along with many of the themes covered in this blog will be explored in greater detail in Madrid.
As markets evolve, so does the infrastructure which supports it and, in the case of the burgeoning tech agenda, this evolution verges on wholesale disruption. This year has seen tokenisation and AI move from IT teams to the boardroom, and with a swathe of new products, partnerships and sandbox trials being announced, it’s likely that many of the solutions to the systemic challenges we face, lie in this space. Tokenisation in particular offers the opportunity for improved collateral mobilisation, intra-day pricing, and deeper market liquidity – all beneficial to stay ahead of market volatility. I invite members and wider stakeholders to read our latest paper which explores not only the value of this technology, but asks the question of why we are not yet seeing its widespread adoption.
June also marks a significant milestone in the history of ISLA, as it has been one year since the inception of our affiliate, ISLA Americas. While still on a journey, we are committed to providing our members, on each side of the Atlantic, one cohesive advocacy voice. The global nature and cross jurisdictional impact of regulation has proven the need and value of this model, which truly benefits our members and wider industry. To read more about the journey, look out for an upcoming article soon to be published in Securities Finance Times, with Fran Garritt.
Readers of this blog may also have heard that after some twelve years at the helm, of my intention to step down as CEO of ISLA by the end of the year. As Madrid 2025 will mark my last summer conference, I very much looking forward to seeing much of my network there, including past and present colleagues, members, board representatives, and friends. I will no doubt have the opportunity to write more on the matter but in the meantime I would like to thank all of our members for their continued support and contribution to ISLA.
Andrew Dyson
CEO
