A number of associations
representing the majority of global securities lending market participants
today announced that they had formed a group to facilitate collaboration and
better coordinate their efforts. The global group, which first met in July,
will collaborate on global priorities such as the integration of environmental,
social and governance (ESG) factors in securities lending programmes and advocating
the benefits of transparent and regulated short-selling to liquid and
sustainable capital markets.
Building on
inter-association coordination to develop the Global Framework for ESG and
Securities Lending (GFESL), which was
released in May, the group aims to develop a more collective approach to
matters of global relevance for securities lending. Through sharing resources,
insights and experiences, it also seeks to enable more impactful engagement
with regulators, exchanges and other standard-setting bodies in all regions.
The founding
members of the group are the:
§ Canadian
Securities Lending Association (CASLA)
§ International
Securities Lending Association (ISLA)
§ Pan Asia
Securities Lending Association (PASLA)
§ Risk Management
Association (RMA)
§ South African
Securities Lending Association (SASLA)
All recognised
securities lending associations and other financial markets associations with
an interest in securities lending are welcome to join the group, which will
meet virtually on a quarterly basis.
Among its first
actions, the group is building a library of ESG resources that draw on the work
of different associations. This will be curated to reflect the rapid evolution
of ESG in securities lending and made available on each association’s website. The
group will also be working together to develop ESG guidelines and thought
leadership in areas such as stewardship, voting rights, collateral and
transparency in the lending chain, while recognising that sustainable finance regulation
and market practice are at different stages of development in different
geographies.
“Participants in the
securities lending market have global reach and global priorities,” said Paul Solway, Director and Communications
Officer at PASLA. “The industry needs to work
together to advance our shared priorities. There are real differences between
regions and even markets within a region, but we can all learn from others in
seeking to implement best practice. We want to ensure that securities lending
increases returns for lenders, supports liquidity and price discovery, and
contributes towards more sustainable financial markets. This group is a great
way to pursue those goals together.”