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ISLA Blog – ICSF Update

COVID-19 | New Members & Partners | EY & PASLA Report | eSeclending Podcast

Welcome to the third edition of the ICSF blog. I do hope you’re all keeping well and managing to keep up with the daily changes and challenges we’re all experiencing right now.

As you all know, the ICSF is pursuing an ambitious Vision & Mission to bring all key stakeholders together to foster global sustainable securities lending, and to reinforce the broader sustainable finance agenda. A recent example of this is how we have committed to achieving the United Nations’ Sustainable Development Goals (SDGs) that apply to our activities, and I am pleased to let you know that we are achieving this right in the midst of the worst economic depression for many decades. In line with SDG 17 (Partnerships), we have expanded our membership by welcoming Norges Bank Investment Management (NBIM), and also developed five new partnerships; Canadian Securities Lending Association (CASLA), EquiLend, FIS Global, IHS Markit, and the South African Securities Lending Association (SASLA). Being a prominent beneficial owner with a strong sustainability agenda, NBIM will reinforce our further work on the Principles for Sustainable Securities Lending (PSSL), whereas partners play a critical role in helping us to achieve our global vision and mission. I strongly believe that organisations must co-operate under a single global code if they are to achieve their sustainable securities lending objectives. That code is PSSL, which should serve a basis for global collaboration and further region-specific or detailed work, such as in Asia as outlined in the excellent report recently published by EY and PASLA.

Also, as you’ll recall, our first position paper, Making Sense of Sustainable Securities Lending & Short Selling During the COVID-19 Crisis, commented on regulatory actions on short selling at the start of the COVID-19 crisis, and how we felt a greater level of engagement between regulators and key stakeholders was necessary to maintain confidence and buoyancy during changeable times. I am delighted with the response and positive feedback received from its publication, and also the volume of of questions from members of the press as well as prominent players within the securities lending community. If I had to distil these to one sentence, it would be, “How are we going to do this and when can we start?”

To answer that, our second ICSF position paper, Reinforcing Global Sustainable Finance by Improving Guidance on Securities Lending, built upon these ideas and proposes a realistic roadmap to start the process. The purpose of this paper is to shift the debate to the broader benefits of sustainable securities lending, and to set out a bold roadmap for engaging with key stakeholders, including regulators, across all markets (hence the ‘holistic’ approach). By creating an environment of openness and trust, we hope that we can work with regulators to keep markets open and robust.

We, at the ICSF, are happy to instigate this process by hosting a roundtable; we would then look to others in the global SL community to take the idea forward. Only through this level of inclusive participation can we achieve the holistic outcomes needed to benefit world markets and ensure regulation that is both measured and effective. I firmly believe that this is a golden opportunity for PSSL to prove their global application, by bringing beneficial owners and regulators together under a mutual alignment with ESG values. This initiative is a perfect example of how the PSSL, currently being adopted by our members, are becoming more global in their reach and can be applied to other functions within the sector.

In closing, I would like to highlight the recent eSecLending podcast, where myself and Matthew Chessum were invited as guest speakers to discuss ICSF and PSSL.

To access the recent EY/PASLA report, please click here.
To listen to the eSecLending broadcast, please click here.

Radek Stech, ICSF Chair

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