In June ISLA welcomed nearly 100 securities lending and financing professionals for an afternoon of economic outlooks, regulatory updates, industry insights and informal networking, for our second annual ISLA London Briefing.
Kindly hosted by Clifford Chance, the afternoon session provided our attendees, including institutional investors and banks, with an update on key trends that are shaping the UK policy and regulatory agendas. In addition, and against that backdrop, there will be a series of panels looking at the business landscape, and areas of focus for UK financial institutions in an increasingly competitive and polarised world.
Key takeaways:
- From a UK economic perspective, while inflation remains a sticking point there is a positive growth outlook with business confidence at a nine-month high, however given the ever evolving geopolitical outlook there may still be many twists and turns in the journey. Against such a turbulent backdrop, the need to be flexible, agile and resilient is key.
- Building on this outlook, we explored the competitive agenda for the UK. With a world leading talent pool, fertile ecosystem for new, tech forward business and increasing alignment between regulators and financial services, the growth of the UK should not be underestimated. Regulation will only go so far, with improved education, a considered approach to risk management and a need to leverage the UK’s strengths being vital to this growth.
- Looking closer at the securities lending industry, it’s been a case of evolution, not revolution. In the mid-term, T+1 will be a defining feature of the market with Basel III, CRD6 and other regulations likely to shape how the market is structured going forward. Alongside this, new markets offer the further avenues to growth and while ESG may not be grabbing the headlines there is expectation that future regulation will continue to evolve rather than dissolve.
- Finally, we looked at the ‘now and future’ of the digital revolution, focussing on the growth and application of digital assets. With key fundamentals such as the Digital Asset Annex and standards including the CDM, in place, we are witnessing a steady increase in the use cases of tokenised assets. With T+1, collateral mobilisation and the ever-growing demand for liquidity providing the ideal catalysts for tokenisation, the technologies’ promise of greater automation and faster settlement should not be overlooked. However, without market collaboration, the risk of ‘token islands’ and limited integration within Tradfi could cause more fragmentation rather than reduce it.
Following the session, delegates joined for a structured networking session, providing the opportunity for guests to connect, and build new networks which are fundamental to the future of our industry.
Many of the topics discussed during the briefing will be covered in more detail at our upcoming 32nd Securities Finance & Collateral Management Conference in Madrid between 17-19 June.
