Reflections of the CEO

SFTR | CSDR | GFF Client Committee User Group | GMSLA Pledge

The last two weeks have been an interesting mix of regulatory engagement here in the UK, together with completion of our major project to deliver a pledge collateral version of our market standard GMSLA. Both highlight how the market is developing and the important role that ISLA can play in that journey.

On the 19 November, I had the opportunity to meet with the Financial Conduct Authority (FCA) to discuss the important initiatives that we are working on, including the pivotal role within the industry to ensure a smooth implementation of the SFTR and CSDR. We should not forget that regulators want to see well-regulated and orderly markets, and it is now generally recognised that industry associations are vital to that process.

On the 20 November, I attended the regular Bank of England Securities Lending Committee (SLC) which has been a feature of our markets for many years. Despite the traditional surroundings of the Bank, this is a very dynamic group made up of various industry stakeholders from across the value chain, including institutional investors, securities lending agents, alternative investment managers and sell-side banks. The SLC creates a platform for an open and candid dialogue, allowing the BoE to understand first-hand the drivers of our market today. This group is also creating a forward-looking agenda that will include key developments such as sustainability as we look into 2019.

To end the week, I spent time with a number of Deutsche Borse clients who meet regularly as part of their GFF Client Committee user group. This offered ISLA the opportunity to talk through with the group the work that we have done around the development of our new pledge collateral master agreement.

Finally, and on the subject of the new GMSLA (Security Interest over Collateral 2018 Version), this week saw the pre-launch of this new ISLA sponsored master agreement. Full details of the new agreements and how to access them are available via our website for ISLA member firms. The use of master agreements provides a level of legal certainty and structure which is increasingly being recognised by regulators and other policy makers as an intergalactic part of a sound and secure financial system. As we think about the challenges that 2019 will bring, particularly around Brexit, it is important to recognise that a robust legal framework that a master agreement brings will provide stability for market participants and end users alike.

Andrew Dyson, CEO

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