The size of the global securities lending industry (securities available for loan) is estimated to be in the region of €24 trillion as at the end of 2020*. Over 90% of this supply is attributable to lendable assets of beneficial owners, in the form of Pension Plans, Insurance Companies, Mutual and Retail Funds, Sovereign Entities and Government offices, Foundations and Endowments, and Corporations (both LLC and LLP).
These statistics clearly demonstrate how significant a role the institutional investor plays in shaping the market, by defining liquidity, reducing settlement risk, providing collateral, establishing terms and conditions, and maintaining corporate governance.
Alongside their overall importance to securities lending markets, beneficial owners are integral to the ISLA membership, with invaluable representation on the ISLA Board of Directors as well as our wider business and technical working groups and streams. In further recognition of this and in January of this year, ISLA launched a new Beneficial Owner-only Steering Group, which aims to actively promote the collective voice of institutional investors within the securities lending market and the ISLA community.
Further links to information and publications with specific relevance to this group can be found across the site, including an Institutional Guide to Securities Lending, as well as Securities Lending Performance Industry Guidance, a set of standards and best practice guidelines in respect of data aggregation and calibration of performance-related metrics for securities lending.
*Source: IHS Markit (December 2020).