Korea Securities Depository (KSD) has announced its plans to amend its Securities Borrowing and Lending (SBL) regulations and set a borrowing limit on each SBL participant depending on their credit ratings. The KSD will restrict participants from settling a new borrow transaction if their borrowing positions exceed the allowed threshold.

Please note that this will only be applicable to KSD participants with low credit ratings and therefore is unlikely to have an impact on many foreign brokers.

As you know, investing in line with environmental, social and governance (ESG) principles has gained increasing momentum within both active and passive strategies, accelerating notably since the start of the pandemic. 

The survey we released in collaboration with EY back in May found that a majority of market participants saw ESG and securities lending as compatible, but it also highlighted the need for more clearly-defined options and standards to guide participants in areas where ESG and securities lending considerations intersect. 

With this in mind, PASLA is now conducting an industry consultation with the aim of creating practical guidelines on the ESG related aspects of securities lending.  These are intended to build on and complement the ISLA Council for Sustainable Finance's (ICSF) Principles for Sustainable Securities Lending (PSSL).  This consultation also aims to engage regional asset owners on how the industry can help them manage securities lending variables in a way that is consistent with their ESG commitments. 

The first phase in this consultation is a survey that we are conducting in collaboration with Asian Investor, a leading publication for the region's investment industry that has a particular focus on asset owners.  This will be followed by more in-depth conversations with selected market participants, the publication of a report by Asian Investor and, ultimately, PASLA's own recommendations.

To complete the survey, please click "Read More" below.   It is open to all market participants and will take approx. 10 minutes to complete. We ask all Agent Lenders to share the link with their Asset Owners clients and encourage them to participate. All responses will be anonymous, but those who complete the survey can opt to receive the analysis of its results.

We warmly invite you to complete the survey and help shape the future relationship of ESG investing with securities lending in Asia Pacific.

On 25 September 2020, China Securities Regulatory Commission (CSRC), People’s Bank of China (PBOC), and State Administration of Foreign Exchange (SAFE) released the new rules “Measures for the Administration of Domestic Securities and Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors” (the “Measures”), and “Provisions on Issues Concerning the Implementation of the Measures” (the “Provisions”). The new rules will take effect from 1 November 2020. 

The new rules further liberalized the Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQFII) schemes, by relaxing qualification requirements, simplifying application process, expanding investment scope and facilitating investment and operations for QFIIs and RQFIIs.

PASLA welcomes these reforms as a significant step forward in accessing and opening up the domestic market for offshore participants.  PASLA will continue to work, in conjunction with ASIFMA, with the relevant regulators to obtain further details and clarify salient points.