The European Commission might temporarily suspend mandatory securities buy-in as part of the Central Securities Depositories Regulation, sources say. Industry groups want mandatory buy-in permanently dropped to alleviate repapering and operational costs.
The Bank of England's Prudential Regulation Authority has published a quantitative impact study to gather information from market participants for a review of the Solvency II regime. Firms should submit responses by 20 October.
The European Banking Authority has started the process of defining regulatory technical standards that more clearly identify shadow-banking entities, including money market funds, and obligations required of the entities. The EBA aims to avoid a repeat of severe liquidity issues that have occurred during the pandemic.
ISLA AGM & Securities Finance Forum 2021 During 6 & 7 October, ISLA will be delivering a series of informative panels, presentations, and discussions as part of a Securities Finance Forum (SFF), to explore the new and known 'influences' and 'influencers to our markets. Ahead of these sessions, ISLA will be delivering its Annual General Meeting (AGM) 2021, which will reflect upon much of the work the Association has carried out over the past twelve months.
Swiss financial-infrastructure operator SIX plans to extend custody services into the US as part of a global growth strategy by expanding the reach of SIX SIS. "This provides the opportunity for US-based financial institutions to get access to all European and Asian markets across a broad range of asset classes with one contractual relationship," says Stephan Haenseler, head of SIX SIS.
A Fidelity survey finds 71% of institutional investors expect to add digital assets to portfolios, while 90% of respondents expect to add digital assets within the next five years. "The increased interest and adoption we're seeing is a reflection of the growing sophistication and institutionalisation of the digital-assets ecosystem," says Tom Jessop, president of Fidelity Digital Assets.
The German Finance Ministry has issued a beneficial-ownership decree that offers updated guidance pertaining to securities lending transactions. Sebastian Adam, senior associate at Hengeler Mueller, examines how the decree compares with previous guidance, writing, "Under the new decrees, every securities lending transaction will have to be reviewed on a case-by-case basis to determine whether the beneficial ownership in the underlying shares has been transferred and whether the [German General Anti-avoidance Rule] may apply."
A challenge in sustainable finance is adapting environmental, social and governance standards originating in Europe to the reality in Asia without watering them down, says Kamran Khan, managing director and head of ESG for Asia-Pacific at Deutsche Bank. Asian ESG standards will not be a cut-and-paste version of European standards, Khan says.
The International Organisation of Securities Commissions has released a consultation on standardisation of environmental, social and governance ratings and on transparency from data providers to prevent greenwashing. "Financial market participants could consider conducting due diligence on the ESG ratings and data products that they use in their internal processes," IOSCO says.
Fund managers in the US are changing investment products to comply with the EU Sustainable Finance Disclosure Regulation. "I have US managers who are very aware of SFDR and who are designing SFDR Article 8 products which have nothing to do with what potential US [environmental, social and governance] regulation [requires]; it's entirely driven by what the EU investors are looking for," says Leonard Ng, co-head of the UK/EU financial-services regulatory group at Sidley Austin.
AccessFintech has partnered with consultancy Capco to boost adoption of the former's Synergy Network, a data-management and workflow solution used by post-trade firms. The offering has become a key resource to firms working to comply with the settlement discipline regime under the EU Central Securities Depositories Regulation.
The EU Central Securities Depositories Regulation and proposed shortening of the US settlement cycle to T+1 could pose challenges for trading firms' middle-office operations, according to a survey by Torstone Technology and GreySpark Partners.
Depository Trust & Clearing Corp., the Investment Company Institute and the Securities Industry and Financial Markets Association aim to reduce the trade-settlement period to one day from two days but say a move to instantaneous, real-time settlement would be far more complicated and would carry additional risks. The change should be "an evolution. ... What you don't want to do is create something so fast that the cash and securities get delivered and there is no way to validate and reconcile", says Tom Price, SIFMA's managing director of technology, operations and business continuity.
Hosted by members of ISLA's Legal and RegTech teams, the latest Legal & Regulatory Broadcast Podcast provides commentary and updates on the association's key priorities across advocacy, regulatory, market practice and legal.
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Wallace Stevens, poet
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