Webinar: Risk and opportunity in the new securities lending environment

Webinar: Risk and opportunity in the new securities lending environment

Wednesday, July 17, 2013
London

VIDEO REPLAY:

The Securities Lending Market has shrunk. This reflects reduced leverage and short selling, and mounting regulatory pressure, but also a continuing reluctance to lend. Whether this reflects anxiety about risk, or lack of confidence in returns, scarcely matters. The net result is a decline in the appetite to borrow and opportunities to lend.

Yet there are still immensely profitable trades to be done, and good reasons to be optimistic about the future of the industry, as well as ample cause for concern. In order to understand the current state and future prospects of the securities lending markets, myInvestorCircle commissioned a poll of institutional investors to assess their current attitudes towards the lending of their portfolios. Are they lending at all? If not, why? And if they are lending, which routes to market do they prefer, and why?
 
In total 67 responses were received from pension funds
 
51% are not lending and 49% are. What explains this difference?
 
Those not lending cited high risk and inadequate returns, lack of demand, unacceptable collateral arrangements, regulatory obstacles and lack of internal resources to manage the process as reasons for not lending. Of the pension funds that lend most are using a conventional route to market despite evidence that other routes can lead to better results. Why?
To explore these and other issues arising from the poll the round table panel will examine the following topics:
 
• What are the risks and opportunities in the new securities lending environment?
• Are the negative reasons given for not lending securities valid?
• Advice on routes to market for funds thinking of starting or restarting a securities lending program.
• What explains the continuing reliance on custodian banks as agent lenders?
• What explains the limited use of third party lending?
• Are custodians obstructing the development of third party lending?
• To what type of client do auctions make sense?
• Would a CCP or a trade information warehouse be useful for end investors?
• What advice should be given to end investors on how best to manage the heavier regulation of the securities lending market?
The webinar will be moderated by myInvestorCircle’s founding partner Dominic Hobson and will include the following panellists:
 
Dominic Hobson – Editorial Director, myInvestorCircle. Dominic Hobson is founder of COOConnect, a peer group network for operational leaders in fund management and institutional investors in funds, especially those which manage their own money or are responsible for operational due diligence.
 
He is also editor in chief of Global Custodian magazine, where his responsibilities include running surveys on Prime Brokerage, OTC Derivative Prime Brokerage, Securities Financing, Securities Lending, Hedge Fund Administration, Private Equity Fund Administration, Mutual Fund Administration and Global Custody.He is a published author, with three books - The Pride of Lucifer, Saturn’s Children and The National Wealth – to his name. He was also amanuensis to Nigel Lawson, former Chancellor of the Exchequer, in the preparation of his memoirs.
 
Dominic was born in Southern Rhodesia in 1958, and educated there and at Magdalene College, Cambridge. He spent four years in investment banking before electing to work for himself.
 
Stephen Sheehan - EMEA Securities Finance Product Sales & Client Management. Stephen joined Citi in January 2006 as a Product Relationship Manager and Director of Securities Finance.He is currently responsible for managing a number of key securities finance relationships in EMEA and developing the business and client base throughout the region. He works closely with the Citi trading desks and product development teams and can draw upon more than 12 years’ experience in the securities industry.
 
Previously, he worked for ABN Amro NV responsible for selling and managing internationalcash management and liquidity solutions to international corporations and financial
institutions. From 1995 to 1999, Stephen worked at Citi responsible for domestic custody solutions before heading up the securities and funds client relationship team.
Stephen holds a BCOMM honours degree from University College Dublin, and is a Registered Representative of the Irish Stock Exchange.He plays an active role at the Citi Dublin offices and has overseen a number of charity fundraising events
 
Simon Lee -Senior Vice President of Business Development for eSecLending in EMEA. Simon’s responsibilities include business development for eSecLending’s securities financing services primarily in the UK, Europe, Middle East and Africa. Prior to joining eSecLending in March 2008, Simon was previously with JPMorgan Chase for 16