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ISLA Irish Roundtable: Investment Funds, Securities Lending, and European Capital Markets

With increasing demand and support from member firms, ISLA held their first Irish Roundtable discussion in Dublin 14th November, attracting over 50 industry delegates that represented funds, legal advisors, banks, consultants, and regulators. 

Gerry Cross, Director of Risk and Policy at the Central Bank of Ireland, together with Bertrand Huet of Fleishman Hillard, provided some fascinating insights into the political environment in Brussels and how Brexit is changing the mood music around financial services in Dublin.  In the context of the Capital Markets Union, both speakers highlighted the importance of the further developments of centres such as Dublin are to ensure Europe achieves its ongoing aspirations around this objective.

Panelists, Jamila Jeffcoate, State Street; Dale Bucknell, Sanlam Asset Management; Maurice Leo, Deutsche Bank and Stefan Kaiser, BlackRock started the discussion by focusing on how the industry has changed since the crisis of 2008, and how it has shaped the Beneficial Owner behaviour such as risk versus reward appetite. The session also explored some of the drivers for change from a regulatory perspective, and what that might mean in terms of alternative ways of doing business such as Pledge or Central Clearing.  The drift towards passive asset management was noted, and the positive impacts that securities lending can have in terms of alpha generation was highlighted.  Whilst UCITS constructs (a feature of the Irish market) have certain restrictions around collateral and tenor that limit opportunities from a securities lending perspective, it was highlighted that many of these funds generate strong revenues from engaging in the activity.

Gerry Cross said: "Events such as these are important to inform perspectives on the role of securities lending in a funds environment". He goes on to explain how ISLA has engaged in a constructive manner with the Central Bank to provide technical insights to help in their role of designing and implementing a financial conduct framework in this area supporting fair, orderly and well-functioning financial markets. 

For more on Investment funds, securities lending, and European capital markets, you can find Gerry Cross's speech available here

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