The primary source of global securities finance news and analysis Issue 227 14 May 2019

Find out what happened at the second

Securities Finance Technology Symposium
in London

ISLA 2018 Pledge vs 2010 Title Transfer | New SFTR working group formed | Technology update from TCS

IS YOUR SFTR SOLUTION

MISSING A PIECE OF THE PUZZLE?
 Unlock the potential
of your portfolio
RBC Investor & Treasury Services’ industry leading securities
finance program helps our clients generate additional returns
within an established risk management framework.

#
1 Custodial lender globally
Global Investor / ISF 2019 Beneficial Owners Survey

To find out more, visit rbcits.com.

The content of this material is of summary matter (and subject to change without notice), for general information only and is intended for institutional clients. Terms and conditions apply.�
The products and services described may not be available in all jurisdictions and may ultimately be offered or provided by RBC Investor & Treasury Services or one of its affiliates within
the Royal Bank of Canada financial group. RBC Investor & Treasury Services make no representation or advice to the legal, regulatory or tax implications of the matters referred to.��

RBC Investor & Treasury Services™ is a global brand name and is part of Royal Bank of Canada. RBC Investor & Treasury Services is a specialist provider of asset servicing, custody,
payments and treasury services for financial and other institutional investors worldwide. RBC Investor & Treasury Services operates primarily through the following companies: Royal
Bank of Canada, RBC Investor Services Trust and RBC Investor Services Bank S.A., and their branches and affiliates. RBC IS Bank S.A. is supervised in Luxembourg by the CSSF and the
European Central Bank. In the UK, RBC I&TS operates through RBC Investor Services Trust, London Branch & Royal Bank of Canada, London Branch, authorized and regulated by the Office
of the Superintendent of Financial Institutions of Canada. Authorized by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited
regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. RBC I&TS UK also
operates through RBC Europe Limited, authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Additionally, RBC I&TS’ Trustee and Depositary services are provided through RBC Investor Services Bank S.A., London Branch, authorized by the Commission de Surveillance du Secteur
Financier (CSSF) and European Central Bank (ECB) and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of
our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. In United States, RBC Investor Services Bank S.A. maintains a
representative office supervised by the Federal Reserve Bank of New York. �In Australia, RBC Investor Services Trust (AFSL 295018) and Royal Bank of Canada (AFSL 246521) are authorized
to carry on financial services business by the Australian Securities and Investments Commission. In Singapore, RBC Investor Services Trust Singapore Limited (RISTS) is licensed by the
Monetary Authority of Singapore (MAS) as a Licensed Trust Company under the Trust Companies Act and was approved by the MAS to act as a trustee of collective investment schemes
authorized under S 286 of the Securities and Futures Act (SFA). RISTS is also a Capital Markets Services Licence Holder issued by the MAS under the SFA in connection with its activities
of acting as a custodian. In Guernsey, RBC Offshore Fund Managers Limited is regulated by the Guernsey Financial Services Commission in the conduct of investment business. Registered
Office: PO Box 246, Canada Court, St Peter Port, Guernsey, Channel Islands, GY1 3QE, registered company number 8494. In Jersey, RBC Fund Administration (CI) Limited is regulated by
the Jersey Financial Services Commission in the conduct of fund services and trust company business in Jersey. Registered office: Gaspé House, 66-72 Esplanade, St Helier, Jersey JE2 3QT,
Channel Islands. Registered company number 52624. In Hong Kong, RBC Investor Services Bank S.A. is a restricted license bank and is authorized to carry on certain banking business in
Hong Kong by the Hong Kong Monetary Authority. RBC Investor Services Trust Hong Kong Limited is regulated by the Mandatory Provident Fund Schemes Authority as an approved trustee.
Royal Bank of Canada, Hong Kong Branch, is regulated by HKMA and SFC. ® / ™ Trademarks of Royal Bank of Canada. Used under licence.
 Lead News Story

Delta Capita forms SFTR testing working group

Delta Capita has formed an industry working phase is to deploy the test pack to help members will be able to benchmark their
group to mutualise the costs of preparing coordinate industry-wide testing. testing run rates and pass rates to highlight
for the Securities Financing Transactions areas of concern for review and remediation.”
Regulation (SFTR). Commenting on the new testing group, David
Field, head of the securities finance practice at Joe Channer, chief executive at Delta Capita,
Delta Capita held various workshops Delta Capita, said: “The test pack will provide added: “One of the lessons the industry has
involving 50 repo, stock lending and full traceability to the regulatory technical learnt from European Market Infrastructure
testing experts to agree on a strategy for standards (RTS)/implementing technical Regulation is the need for both efficient testing
SFTR testing. standards (ITS), European Securities and within firms and industry level co-ordinated
Markets Authority guidance and industry best testing. With complex industry practices
The working group includes prime brokers practices across repo, buy/sell back, stock such as collateral treatment, life-cycle events
and agent lenders and is in active discussions borrow/loan and margin lending.” and changes to disclosure mechanisms, the
with the industry trade associations, service industry sees value in a robust, independent
providers and trade repositories. Field added: “It will provide users with the test testing regime.”
data, test scripts and expected results they
The first phase of preparations is to create a need to conduct their UAT and to test with The working group got the backing of the
standardised test pack for user acceptance their counterparts, trading venues, service International Securities Lending Association’s
testing (UAT) covering 227 SFTR trade providers, central counterparties, triparty CEO Andy Dyson, who said: “ISLA will support
scenarios and 54 lifecycle events. The next agents and trade repositories. Consortium this initiative and work with it wherever we can.”

www.securitieslendingtimes.com 3
Inside SLT

Latest News Latest News

Broadridge has acquired Rockall, a Bursa Malaysia Berhad has started testing
technology firm in securities-based lending the opportunities afforded by blockchain
and collateral management technology in SBL via a PoC
page 6 page 8

Publisher: Justin Lawson

justinlawson@securitieslendingtimes.com
+44 (0) 203 750 6028
Technology Update Conference Report
Editor: Becky Butcher How can technology help manage collateral Machine learning and AI proved to be popular
beckybutcher@blackknightmedialtd.com and improve market efficiency? Biser Dimitrov topics at the second Securities Finance
+44 (0) 203 750 6026 of TCS explains more Technology Symposium
page 13 page 16
Reporter: Maddie Saghir
maddiesaghir@blackknightmedialtd.com
+44 (0) 203 750 6019

Reporter: Jenna Lomax

jennalomax@blackknightmedialtd.com
+44 (0) 203 750 6018

Creative Director: Steven Lafferty

Office Manager: Chelsea Bowles

+44 (0) 203 750 6020 Data Analysis Industry Appointments
Sam Pierson discusses how exchange offers All the latest securities lending comings
Published by Black Knight Media Ltd reflect the key role securities lending plays and goings at Vermeg, Pirum Systems,
Copyright © 2019 All rights reserved in the plumbing of global financial markets MarketAxess and more
page 22 page 26

4 Securities Lending Times

 INTRODUCING

The Hanweck
Borrow Intensity
Indicator

Delivering new levels of

transparency into the
securities borrow market

By mining rich data from the options market in an

understandable way, the Hanweck Borrow Intensity
Indicator provides:

›› Real-time transparency into securities lending rates

›› Rapid signals on rising shorts and squeezes

›› Unique insight into multiple financing rates across time

›› Valuable data for risk estimation and factor models,

portfolio construction and smart beta approaches

› NEW YORK › BELFAST › CHICAGO

Hanweck is a leading provider of real-time risk analytics on global

derivatives markets, focusing on the large-scale risk problems of banks,
broker/dealers, hedge funds, central counterparties and exchanges.

Hanweck.com
News Round-Up

Hazeltree introduces new securities

finance solution

Hazeltree has introduced Hazeltree Securities

Finance Version 7, a portfolio finance solution
integrated with new market colour, benchmark
and intra-day rates and utilisation trends.

Hazeltree Securities Finance Version 7

offers full visibility of the global securities
lending market to benchmark performance,
efficiently execute, and optimise returns in one
centralised solution.

It also enables hedge funds, asset managers

and beneficial owners to identify and monitor
treasury market inefficiencies and opportunities.
Broadridge acquires Rockall
Meanwhile, it also obtains demonstrable
Broadridge has acquired Rockall, a levers that drive enhanced credit risk best-execution financing rates, attributes
technology firm in securities-based management. Rockall noted that they and records financing accruals on a portfolio
lending and collateral management. also provide regulatory reporting, process or strategy basis, and efficiently transfers
simplification and capital efficiency. securities with OneClick between prime
The acquisition expands Broadridge’s brokers, custodians and banks.
core front-to-back office wealth Michael Alexander, head of North American
capabilities, providing securities-based Wealth and Capital Markets Solutions Using Hazeltree Securities Finance Version
lending and collateral management for Broadridge, said: “The acquisition of 7, industry participants benefit from insight
technology solutions. Rockall provides Rockall is the most recent example of offered by Hazeltree’s leading market
a cloud-based wealth lending solution, Broadridge growing our wealth franchise data partners.
and FASTNET, which automates the by expanding our core wealth offering
evaluation, monitoring and management for clients. securities-based lending and This includes daily and intra-day market
of securities-based lending. collateral management are key industry rates and prices as well as intra-day activity
areas in need of innovation, and we look displaying recalls and new borrows.
Additionally, Rockall’s offerings include forward to leveraging next-generation
an enterprise banking collateral technology to provide proven solutions to Hazeltree’s president and CEO Sameer Shalaby
management solution, and COLLATE, clients while mutualising key front-, middle- commented: “Traders, portfolio managers
which supports strategies and change and back-office functions.” and portfolio finance experts need to know

A range of apps that will transform

your securities finance business
2016 and 2017
Best Software Provider

6 Securities Lending Times

 ... to the next level.

Let Securities Lending take you...

Make idle assets work harder with Securities Lending. Behind the scenes,
we generate low-risk additional revenues on your securities. The only impact
on your business is enhanced performance figures, and today, every basis
point counts.
We offer tailor-made agency, principal and lending solutions with remote
www.munier-bbn.com

access to suit your precise needs.

CACEIS, your comprehensive asset servicing partner.

Contact:
Dan.Copin@caceis.com

www.caceis.com
News Round-Up

securities finance trends as well as have for margin calculation, reconciliation and Bursa Malaysia and FORMS to drive the
the best available market colour including messaging as part of BNY Mellon’s collateral development of the blockchain-enabled
important intra-day updates.” service offering. lending pool to suit the industry’s specific
needs, cost and efficiency pressure.
“Hazeltree Securities Finance Version 7 gives This collaboration, in conjunction with BNY
users a more complete, timely picture of Mellon’s existing bilateral margin capabilities, Those collaborating include Affin Hwang
activities in the securities finance market to enables clients to meet their obligations under Investment Bank Berhad, CIMB Investment
improve their ability to monitor, obtain and Phases 4 and 5 of the non-cleared margin Bank Berhad, Citibank Berhad, Kumpulan
demonstrate best-execution.” rules, all in one place. Wang Persaraan, and Malacca Securities
Sdn Bhd.
BNY Mellon selects AcadiaSoft’s AcadiaSoft acts as a central repository for
collateral solution calculating IM, enabling market participants It was noted that this initiative is the first POC
to use the utility as a single point of contact project designed to explore and address the
BNY Mellon has selected AcadiaSoft’s end-to- through which to conduct their messaging challenges faced in SBL in Malaysia.
end collateral solution to fully outsource its and calculations.
non-cleared margin workflow. Datuk Muhamad Umar Swift, CEO, Bursa
Jonathan Spirgel, global head of liquidity Malaysia, said: “Across different markets,
The solution allows clients to access and segregation services at BNY Mellon, empirical studies show that short selling helps
AcadiaSoft’s initial margin (IM) risk suite said: “Our aim is to streamline the collateral provide additional liquidity and improves price
workflow for clients, making it easier for them efficiency. The growth potential of Malaysia’s
to meet their regulatory requirements.” SBL market makes it a prime candidate where
the power of blockchain technology can create
He added: “Adding the AcadiaSoft a considerable impact.”
functionality means they’ll only need to
In partnership with
share their derivatives portfolio with us “The collaboration also benefits the wider
once daily, thereafter, we’ll calculate their IM industry through new knowledge, insights
and instruct the movement of the collateral and practical experience in harnessing digital
required accordingly.” innovation to support and drive the growth of
the capital market.”
AcadiaSoft’s CEO Chris Walsh commented:
“We’re thrilled to be able to offer buy- OCC’s securities lending CCP
side derivatives market participants activity dips in April
access to AcadiaSoft’s IM calculation and
reconciliation services for the very first time OCC’s securities lending CCP activity was
through BNY Mellon.” down 1.6 percent in new loans from April 2018
Don’t get left behind. with 109,141 transactions last month.
Bursa Malaysia tests blockchain in
securities lending POC Year-to-date stock loan activity decreased 2.3
percent from last year with 447,595 new loan
Bursa Malaysia Berhad has started testing transactions in 2019. The average daily loan
The joint IHS Markit and
Pirum solution has: the opportunities afforded by blockchain value at OCC in April was $70,839,683,397.61.
technology in securities borrowing and lending
 40 Clients signed up to the
solution
(SBL) via a proof of concept (POC). Futures cleared by OCC reached 5,545,302
contracts in April, down 24.8 percent from
 SFTR and MiFID coverage Bursa Malaysia suggested that blockchain April 2018.
 All SFTs covered technology will develop greater transparency
and address other operational challenges Overall exchange-listed options volume
 A full end-to-end solution
associated with the SBL market in Malaysia. reached 380,420,404 contracts in April, down
 A fully ringfenced data model
4.5 percent from 398,481,297 last year.
The project aims to improve efficiency,
speed and capacity in securities lending Total cleared contract volume in April
supply and borrowing demand. Meanwhile, reached 385,965,706 contracts, a 4.9
www.pirum.com
several SBL entities are collaborating with percent decline compared to last April.

For more information contact

8 Securities Lending Times
connect@pirum.com or call
+44 (0)20 7220 0968 (UK & Europe)
Track,
analyze,
execute.
Know your risk and rewards.
Independent securities lending
performance and risk evaluation services
to take your business to next level.
‒ Unparalleled benchmarking tools for your securities
lending performance
‒ Evaluation of revenue and risk
‒ Leverage extensive historic data covering $21 trillion
of global securities
‒ Independent management reporting of results versus
framework and strategic objectives
‒ Research and thought leadership

Learn more @ markit.com/SecuritiesFinance

The global leader in securities finance solutions

170462879-MT-0817

Trusted. Innovative. Independent.

Contact us
E MSF-Sales@markit.com

americas europe, middle east and africa asia pacific

T +1 212 931 4910 T +44 20 7260 2301 T +65 6922 4220
News Round-Up

OCC’s year-to-date average daily cleared SETL has restructured its balance sheet and cryptography and cybersecurity committee
contract volume is 19,200,350, down simplified its business model. As part of the and will now lead those activities from the
12.8 percent compared to 2018’s record- restructure, SETL will now offer blockchain- board. SETL shareholders and executive
breaking result. based solutions across a broad range directors include Anthony Culligan (chief
of commercial cases in partnership with engineer), Peter Randall (president), Nick
SETL delivers on administration plan existing financial service providers and will Pennington (CTO) and Katherine Kennedy
continue to support infrastructures powered (general counsel).
SETL, the London-based institutional payment by SETL blockchain.
and settlement infrastructure provider using Walker commented: “The objectives of the
blockchain technology, has completed a Under the direction of its CEO, Philippe Morel, appointment of Quantuma by the board were
corporate restructuring programme. who joined in 2018, SETL has restructured twofold. Firstly, to act as a neutral party to
its cost-base, refocused its operations in its represent the interests of all its creditors and
In March, the previous entity SETL London and Ipswich development centre stakeholders. Secondly, to help shape the
Development, announced that it had appointed and now expects “to deliver robust financial future structure to enable the firm to balance
Quantuma as its administrators. performance for its shareholders”. its strategic infrastructure holdings and
continue its software development activities.”
The newly-formed SETL has acquired the Sir David Walker, former chairman of Barclays,
operating assets, the staff and intellectual has been appointed chairman of SETL while Chawton picks Northern Trust for
property rights of SETL Development. SETL Christian Noyer, honorary governor of the brokerage and custody services
has reached an agreement with all its Banque de France, has been appointed as lead
major clients to continue its support and independent director. The newly restructured Chawton Global Investors has chosen
development activities and expects to push firm also welcomes Professor Philip Bond Northern Trust to provide its brokerage and
ahead now with a number of core initiatives. to the board, who previously headed SETL’s global custody services.

EXPERTS IN:
SECURITIES LENDING
ACHIEVE GREATER
RISK MANAGEMENT
CLIENT SERVICING
ALL OF THE ABOVE

To learn more, visit northerntrust.com/securitieslending

ASSET SERVICING \ ASSET MANAGEMENT \ WEALTH MANAGEMENT

DIRECTED TO PROFESSIONAL CLIENTS ONLY. NOT INTENDED FOR RETAIL CLIENTS. FOR ASIA-PACIFIC MARKETS, THIS MATERIAL IS DIRECTED TO
INSTITUTIONAL INVESTORS, EXPERT INVESTORS AND PROFESSIONAL INVESTORS ONLY AND SHOULD NOT BE RELIED UPON BY RETAIL INVESTORS.

© 2016 Northern Trust Corporation, 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the United States. Products and services provided by subsidiaries of Northern Trust Corporation may
vary in different markets and are offered in accordance with local regulation. For legal and regulatory information about individual market offices, visit northerntrust.com/disclosures. Issued by Northern Trust Global Services Limited.

10 Securities Lending Times

 News Round-Up

Chawton will have access to Northern Trust’s competitive in today’s challenging post-the that was set against the strong performance
Integrated Trading Solutions capability, second Markets in Financial Instrument seen last year.”
offered through Institutional Brokerage, Directive environment, helping future-proof
which delivers a range of services from their strategy for tomorrow.” When revenues are under pressure, Dyson
trade execution to matching and settlement. suggested that firms look to reduce their cost
Integrated Trading Solutions and Institutional Q1 2019 sees reduced earnings for base to maintain their bottom-line performance.
Brokerage, part of Northern Trust Capital major programme providers Initial signs are not good either with Securities
Markets provide foreign exchange, securities Financing Transactions Regulation (SFTR)
lending and transition management services. Major programme providers have reported and Central Securities Depository Regulation
reduced earnings in Q1 2019 compared with demanding attention and resource. He reflected
Crawford said: “We selected Northern Trust to the same period last year, highlighted by Andy that there are potential green shots of a real
support this investment approach and meet our Dyson at the International Securities Lending opportunity for the industry that will over time
brokerage and dealing requirements primarily Association’s (ISLA). radically change the cost base of the industry.
because of its innovative technology platform,
demonstrable expertise and trusted approach Dyson revealed the reasons behind losses He explained: “Much of the work we are doing
in this area, plus significant global reach.” include regulatory balance sheet constraints at ISLA around SFTR is driving the market
through to the absence of specials activity. towards the adoption of a standard operating
Guy Gibson, global head of Institutional model, built around common data definitions
Brokerage at Northern Trust, said: “By He explained: “While it is hard to judge what and consistent interpretation of life cycle
outsourcing the entire trade lifecycle, is the predominant factor that is depressing events. Once this work concludes, it will then
investment managers like our client can revenues, the industry is clearly under be only a potentially small step to effectively
drive cost efficiencies, facilitate regulatory some pressure as trading desks and senior codify these best practice parameters in the
compliance, reduce risk and remain management look at budget targets for 2019, form of a common domain model (CDM).”

Transforming the world of

Securities Finance.
At Stonewain, we understand the importance of being secure and agile, which is why we
created a fully-integrated technology solution 'Spire'. Spire's architecture meticulously integrates
with your organization's IT system, consolidates workflows and cohesively performs with other
proprietary systems.
It's time to give your business the Spire Advantage.

Global Stock Loans and Borrows Collateral Management & Optimization Repo/Financing
Agency Lending Cash Management Regulatory Locates

400 Connell Drive, Suite 5300, Berkeley Heights, New Jersey 07922
info@stonewain.com www.stonewain.com 973-788-1886 973-315-3092

CUT SIZE 180mm x 120mm BLEED SIZE 6.35 mm X 6.35 mm

www.securitieslendingtimes.com 11
Malik’s Memo

ISLA 2018 Pledge vs 2010 Title Transfer

In March this year, the International Securities Lending Association Validation of structure
(ISLA) published legal opinions related to its new pledge Global
Master Securities Lending Agreement (2018 Pledge GMSLA). Given There has been surprisingly little litigation where the dispute turns
that GMSLA is the most widely-used master agreement for securities on an interpretation of the GMSLA. The last time GMSLA 2010 was
lending, and that this is the first new major version in eight years, scrutinised in the English courts was in a case between Landsbanki
surprisingly little has been written on the topic. and Raiffeisen Zentralbank in 2016 (judgement handed down in
2017). The area of dispute was limited to the narrow point on whether
Recall that under GMSLA 2010, collateral is delivered on condition that the GMSLA allowed for service by fax (it does).
“all right, title and interest, shall pass from one party, free from all liens,
charges and encumbrances”. Thus, security is taken by what is called English courts have traditionally upheld the right of two freely
a Title Transfer Collateral Agreement (TTCA). As the phrase implies, contracting parties to decide the terms of contract. The International
title is passed from one party to the other. Swaps and Derivatives Association’s (ISDAs) has been validated
on this basis, despite—on the face of it (and as has been argued)—
Subject to an obligation to return the collateral at a future date the idea that a master agreement with subsequent confirmations
and other provisions such as manufactured payments, the lender constituting one single agreement thereby allowing netting in the
counterparty legally owns the security and the borrower collateral event of default being somewhat contrived.
provider does not maintain a security interest. In legal terms, transfer
of absolute title ‘free from all liens, charges and encumbrances’ is The pledge structure appears to effectively circumvent the
the strongest form of taking security. In the event of default, the regulatory balance sheet hit while not compromising too much on
lender legally owns the security and can hence keep it and sell it the integrity of security taken. There is no doubt the risk profile
without the need for litigation. is altered due to a pledge—even with associated segregated
custodian account agreements—is an inferior form of security
All very good, but the downside to a TTCA is that borrowers typically over than transfer of title.
collateralise (due to haircuts) thereby being a net creditor. Depending on
the lender’s credit quality, inadvertently, the borrower is stung by a Basel But in structuring the transaction this way a reasonable balance
III regulatory capital charge as its claim on this excess collateral amount appears to have been reached.
is considered a risk-weighted asset (RWA) on the entity’s balance sheet
and requires an allocation of capital. Hence, borrowers are currently It remains to be seen whether lenders increase their rates due
favouring lenders without RWA—under Basel III, since January 2019, to an inability to re-use collateral (under TTCA by article 15 of the
globally systemically important banks must meet a minimum total loss- Securities Financing Transaction Regulation, lenders are allowed to
absorbing capacity of at least 16 percent of RWA. re-use collateral).

To use legal terminology, this is the ‘mischief and defect’ that the new
2018 Pledge Agreement seeks to remedy.

Pledge mechanism

Under the pledge agreement, collateral title is not transferred rather it

is pledged to the lender/collateral taker into a segregated account at
the custodian. The lender, hence, does not own the securities rather
takes possession of them and maintains a security interest. With the
2018 Pledge Agreement’s accompanying documentation, including
a security agreement and tri-party custodian-borrower-lender
agreement, the collateral is effectively segregated from the lender’s
Seb Malik
assets thereby protecting it from being subsumed in the event of the Head of financial law
lender’s insolvency. Market FinReg

12 Securities Lending Times

 Technology Update

Biser Dimitrov
Enterprise blockchain architect
Tata Consultancy Services

Tackling technology head on

How can technology help manage collateral and improve market
efficiency? Biser Dimitrov of Tata Consultancy Services explains more

www.securitieslendingtimes.com Securities Lending Times 13

Technology Update

Maddie Saghir reports What are the opportunities to be had with non-cash
collateral and what are the challenges?
What are some of the main challenges with conducting
a securities lending transaction? Our latest research data shows that there is a general migration
from a cash to a non-cash environment, accompanied by a decrease
We can clearly distinguish three main groups of challenges in of corporate bonds as non-cash collateral. On the other hand, the
securities lending transactions. The first group I would call structural, non-cash collateral represents at least 60 percent of all transactions
and the challenges there are related to the inherited complexity globally and as much as 90 percent of European government bond
and multi-level hierarchy of transaction workflows with multiple lending. One of the main challenges with non-cash collateral is
intermediaries. We also have to deal with all the non-standard that its availability depends heavily on the settlement dates. For
process interfaces with multiple entities, and lastly, there is a lot of example, non-cash collateral is not transferred to the lender until the
fragmentation of collateral pools across counterparty and depots. settlement date, which prevents the lender from properly allocating
those securities until they are received.
The second group I would call transactional, and here I would
include the inability to track on near-real-time basis, the lack of
straight-through process (STP), and timely exception management
and enforcing restriction on re-use and re-hypothecation. The
transactional inefficiencies result in higher costs and errors
requiring manual interventions.
One of the main
I would classify the third group as regulatory challenges where
we have to deal with different levels of account segregation
challenges with
requirements and the difficulties achieving transparency and non-cash collateral
disclosure at all the levels. is that its availability
How can technology help clients manage collateral in depends heavily on
a securities lending transaction? the settlement dates
Due to the rapid growth of distributed ledger technologies
(DLTs), blockchain technologies and the maturing of tokenisation
concepts, we saw an opportunity to improve the way non-cash
collateral is managed.

We have developed a system based on blockchain and smart

contracts, which tokenises the collateral used in the securities How can technology help improve efficiency?
transaction. We have replaced the collateral agreement with a set
of custodial smart contracts that sit between the borrowers and We have seen great benefits from implementing a DLT solution
lenders. Because of the efficient use of tokenised collateral, we providing a single source of truth; it eliminates the need for
have reduced the counterparty risks and complexity, lowered the reconciliation as well as plugging in a robust smart-contracts-
costs and managed to achieve the following benefits: based layer. Smart contracts are, in essence, software programmes
• Increased visibility of the available collateral—the securities that, once deployed on a blockchain, can store and record the
are made available for other transactions/usage immediately terms of a contractual agreement or any predefined business
after settlement logic. For our specific case of collateral management, we saw that
• Made the collateral already available in case the borrower smart contracts can replicate the existing central counterparties/
defaults, and it can be used to cover the lender’s losses collateral management/bilateral collateral framework and collateral
• Overall improved efficiency agreements. We have embedded business and operational rules
• Eliminated dispute management to enforce the required performance. The benefits we experienced
• Eliminated the need for reconciliation from our DLT solution include:
• Enabled instant settlement • Event/rule-based triggering of transaction workflow and
• Enhanced regulatory transparency automated execution
• Reduced back-end functions, saving costs and enhancing • Linkage with securities accounts at central securities depository/
efficiency depots. Cash accounts are plugged in via Stablecoin frameworks
• Eliminated manual errors and associated risks, building • A simplified and less hierarchical business process with an
confidence in the market optimised interface

14 Securities Lending Times

 Technology Update

• Real-time/near-real-time transaction updates applying DLT and have a complete understanding of the problem
• Privilege-based transactions and ‘view only’ access to you are trying to solve. At the end of the day, blockchain is not
involved entities one-solution-fits-all, and for that technology to work it needs
a deep understanding of the use case and to be applied by an
Some in the industry argue that blockchain is a experienced team.
solution looking for a problem, what are your thoughts
on this? What projects are Tata Consultancy Services currently
working on in the technology space?
We used to hear that a lot in early 2017, but not anymore. We are
lucky enough that the CIOs and CTOs we work with are already TCS is working on multiple blockchain/DLT implementations for
past that stage and, through numerous proof-of-concept and the customer across multiple industry verticals. In the banking,
pilot projects, are well convinced that there are huge benefits of financial and insurance services space we have helped our clients
a distributed trust system in an enterprise environment. These implement multiple proofs-of-concept/value, pilots and a few
new systems are able to provide the disruption and thus the production systems in the areas of corporate actions, KYC, custody,
leadership in the financial services that everyone is looking for. commercial lending, securities lending, mortgage servicing rights
The change of the paradigm is covering almost every aspect of transfer, loan origination etc.
the current operations, from governance, rules and oversight,
through change in the regulatory frameworks, to enabling privacy, We have also helped our clients in aviation with implementations
complexity and scalability. ranging from aircraft maintenance tracking to baggage tracking.
Similarly, in healthcare and insurance space we have implemented
The use cases where blockchain and DLT can be applied cold chain, medical drug supply chain counterfeit detection etc. In
successfully are numerous and span over huge industries the renewable energy space, a marque implementation we did is
like telecommunication, aviation, supply chain, trade finance, the trading and tracking of renewable energy certificates. SLT
custody, data storage, know-your-customer (KYC) and identity
verification, travel and e-commerce. The important point is to Responses were written by Biser Dimitrov and Chak Kolli, Phd, CTO
fully understand the use case and estimate the trade-offs when of the BFSI North America unit.

www.securitieslendingtimes.com 15
Technology’s ticking clock
Machine learning and AI proved to be popular topics at the second Securities
Finance Technology Symposium in St Paul’s, London, but some suggest that
technology is still not being used to its full advantage

Kicking off the conference, speakers discussed data on a panel

Maddie Saghir and Jenna Lomax report
entitled ‘Data - The Fuel for Automation’. David Lewis, senior director
For the second year running, Securities Lending Times hosted its Securities at FIS, noted that there is lots of interesting data out there, which gets
Finance Technology Symposium in London. Hot topics included: data, our attention, brings innovation and drives competition. However, he
machine learning, artificial intelligence (AI), collateral optimisation and pointed out that “there is a lot to be done in the basement, we won’t
management, liquidity platforms, and of course, the Securities Financing get the basics right unless the industry sorts the foundations”.
Transactions Regulation (SFTR). Technology was at the heart of the
conference but the main consensus seemed to be that the securities He argued: “We talk about AI and machine learning but until
finance industry is still not utilising technology to its full advantage and is we strengthen the foundations of our basic data, we won’t see
perhaps behind in this area compared to other industries. transformational change.”
Lewis explained that the SFTR is a “helpful driver as purses are
very much more open when you use a regulatory flag. People are
investing in getting the regulations right which has the potential
to dramatically improve the quality of data held and exchanged
between counterparties”.

“I would focus on getting the building blocks right; we can play with
the fun stuff but we can’t get the yield from the kind of automated
efficiency that we are capable of without getting things like standard
settlement structures right.”
Conference Report

The moderator, Andrew Dyson, ISLA CEO, asked the panel if the In the SFTR Regulation and Reporting panel, Harpreet Bains, executive
regulatory agenda gets more focus from a budget perspective. director, agent lending, global product head, J.P. Morgan cited: “The
Dyson said: “Is it a constraint that there is not the budget for some industry needs to keep the impact of getting SFTR wrong in sharp focus.”
of these things?”
The moderator, Val Wotton, managing director of Deriv/SERV, DTCC,
In response, Paul Wilson, managing director at IHS Markit, asked panellists what lessons can be learned from previous regulation
explained: “You can’t avoid the regulatory agenda because by implementation and how those can be applied to SFTR.
definition you have to otherwise you don’t have a business. My
challenge to all of you is that there has been a huge amount of Bains highlighted that whilst it’s understood that regulators have
automation that has occurred but we have tended to automate indicated they are sympathetic to challenges in the new regulatory
existing processes.” environment, we can still expect to get severe fines for misreporting.

Wilson continued: “We have not stepped outside of the box and She said: “We have to be really careful that we are not copying or
addressed Agency Lending Disclosure (ALD). The industry has spent manufacturing data to make a fully matched report—a matched report
vast sums on automation but we have missed a trick and ALD has the is not necessarily an accurate or compliant report.”
potential to drive some out of business.”
In another panel on SFTR, Mark Steadman, executive director of
Panellists also discussed how they use data, and Ed Oliver, managing European head of product development and change management,
director, product development, eSecLending, said: “eSecLending is a big DTCC, commented: “History tells us that trade repositories are much
user of data and it is a core element of what we do. Over the next two better prepared for SFTR than other regulations in the past.”
years, we are going to become a huge giver of data as well. As users
of data, we need to find ways of finding it interesting and relevant for Steadman discussed the difference in preparation to SFTR, compared
what we need.” to the readiness shown with the European Market Infrastructure

18 Securities Lending Times

 Conference Report

Regulation (EMIR), indicating that this time around, the regulators lifecycle events and specific fields that are pending regulatory
might not be so forgiving as they were under EMIR on day one, as the clarification. He added: “We are learning from our individual data
industry has had a long time to implement SFTR. flows. We are also looking at the cross over with the second Markets
in Financial Instruments Directive (MiFID II) reporting for ESCB
Regarding SFTR, John Kernan, senior vice president and head trades and how SFTR fields will be mapped to MiFID II.”
of product development at Regis-TR said he would like to take a
slightly more optimistic view concerning SFTR, hoping that national Although he indicated the relatively low volume and the complexity
competent authorities (NCAs) are pragmatic and give a six month involved in switching eligibility between the two regulations should
grace period when reviewing data quality issues. not be underestimated.

The moderator, Pierre Khemdoudi, managing director of global head Khemdoudi then went on to ask how ready the industry is for SFTR
of equities, data and analytics products at IHS Markit, asked panellists implementation and what areas still need the most improvement.
what kind of expectations there would be from regulators on day one
of SFTR implementation and how their firms were preparing. Seb Malik, head of financial law at Market FinReg, said: “With UAT
testing, some issues we are facing [as an industry] are to do with
Kernan highlighted that Regis-TR had recently put out its user booking of repos. Repos, we quite often find, are booked to securities
acceptance testing (UAT) environment and indicated the roll out of the lending. But nothing will match if you’re not booking it correctly.”
trading module is scheduled in London, Luxembourg, Frankfurt and
Madrid over the coming weeks. Khemdoudi then asked what the panellist would advise market
participants if they indicated they were not ready for SFTR. Laird
Craig Laird, executive director of Morgan Stanley said Morgan emphasised the importance of reference data accuracy and control
Stanley’s core repo and securities lending build is “progressing well”, as well as the significance of a robust control environment and having
although there remains a number of open questions concerning the right team of people to work with.

www.securitieslendingtimes.com 19
Conference Report

The conference also had a panel on post-trade, in which Rob Frost,

global head of product development, Pirum Systems, argued that
Distributed ledger technology (DLT) may solve individual problems in
post-trade, but it won’t replace all current systems in the medium term.

Frost indicated that DLT cannot survive on its own and will need
to connect with existing systems, especially when concerning
the navigation of regulations such as the Central Securities
Depositories Regulation (CSDR) and SFTR.

The moderator, Dan Barnes, editor of The Desk, went on to ask the
panellist who would drive the adoption of DLT and similar technologies.

Laurence Marshall, COO at EquiLend, suggested that the adoption of

technology is better today than it has been for the last few years.

Marshall said: “With new technology coming out all the time, and more
and more data becoming available, there is an important requirement
to look at different infrastructures.”

Frost explained that new technologies can offer a lot to help avoid
fines and solve regulatory reporting issues. He said: “There was a
struggle to get adoption of technology in post-trade in the past, but
now the back office and front office’s obligations are converging, that
is what we are seeing at Pirum, anyway.”

Marshall cited it was important to understand that “answers are not

always found in technology”.

He highlighted: “The marketplace is becoming more complex and

difficult with a wider variety of solutions available within post-trade,
whether it’s to help with structures or digitalisation. But things are
never as quick as you would like them to be.”

Barnes then went on to ask the panellists what were the main pressures
that the post-trade sphere was facing in terms of technology.

Dave Grace, head of post-trade for the UK at Capco, said that CSDR
will help “harmonise and standardise market practices, while it has
already allowed T2S to survive and thrive.”

Grace explained: “The more the European Union regulations such

as EMIR and CSDR foster a competitive environment, the more
competitors there will be entering the game.”
Malik mirrored: “Training is key, whoever you use is absolutely
fundamental, from your IT team all the way up to management. Make He added: “In terms of technology, there will come a point where
sure everyone understands what is going on.” legacy technology will become horrifically old and unmanageable.
Firms will have to decide if they want to continue spending money
He added: “Work with the working groups, such as the ISLA and maintaining them. There are currently a lot of legacy systems holding
International Capital Market Association.” back-offices together across the industry.”

“We want to make sure we are all working to the same set of Grace cited that regulation should be used as a catalyst for business
industry standards. Across every corner of Europe we want to be model and technology change, specifically regulations such as SFTR
working to the same interpretation of fields.” and CSDR.

20 Securities Lending Times

 Conference Report

When asked what they would advise firms to prioritise in preparation

for the growth of technology, panellists suggested treating coming
regulations like CSDR and SFTR as an obligation to duplicate
industry requirements.

Frost suggested to leverage connectivity and projects that are already

underway, as well as to participate in working groups and make sure
that all teams across post-trade lifecycle are aware of the tools that
are available to them.

Later in the day, Tammy Phillips, founder and CEO of Asterisk Network
Solutions, said: “Our peer to peer network enables beneficial owners or
hedge funds to achieve direct market access or access via an agent.
We have provided the opportunity for prime brokers to alter their legacy
structure to move from a principal in a securities lending transaction to
becoming an agent. One of the key reasons we did this was because the
market has evolved in such a way that the vast majority of outstanding
GC transactions are loss-making transactions for prime brokers.”

“The market has continued to recover since the financial crisis and we
have adjusted to 100’s of new regulations, we have been doing well
and there were collective pats on the shoulder… it’s often difficult to
encourage an organisation to do something new when times are good
and revenues are up year on year. However, over the course of the
last year, that peak stopped, we have to change the status quo from a
year ago today, the market is changing quicker than we are. We need
to have the determination and courage to deliver something for the
market, not for an individual organisation.”

Meanwhile, Matt Wolfe, vice president, business development, OCC,

predicted the industry is moving towards a more open network if
the proper privacy and protocols are in place. He emphasied that it
is challenging because many in the industry have legacy systems,
including OCC but they are working on an initiative to replace it. In
terms of SFTR, Wolfe explained that the regulation is highlighting the
problem that many beneficial owners “are not comfortable having
their identity disclosed by their counterparty, which is a big challenge
that needs to be addressed.”

Turning to technology, he said: “DLT has a lot of opportunities and

areas that can be addressed. Standardisation is where everyone on
the network agrees on a standard process as well as on the inputs.
The results of that agreed upon set of inputs and processes are
always going to reach the same results.”
are incredibly inaccurate, slow and brilliant, and only together can they
Another speaker said that they are pessimistic about DLT: “There are work really well.
a lot of challenges to implementing it. Think about how much effort
there would be in trying to get everyone to that progress. There is Wolfe highlighted that there is a role for humans to be involved with
also environmental concern around DLT—they are not efficient. The machine learning, especially when the costs of the results being
network itself takes up a lot of powerful engines. I think the adoption wrong are high or when data is sparse.
rate of DLT will be slow.”
He concluded: “Change is happening faster and we need to take it
Towards the end of the panel, Wolfe referred to a quote which suggests upon ourselves to do a bit of self-learning [for technology]. I would
that computers are incredibly fast, accurate and stupid, while humans encourage you all to pursue and investigate these ideas.” SLT

www.securitieslendingtimes.com 21
Data Analysis

Hooray for exchange offers

IHS Markit’s Sam Pierson discusses how exchange offers reflect the key
role that securities lending plays in the plumbing of global financial markets
When Eli Lilly (NYSE:LLY) announced it would spin off the remainder shares per tendered LLY share, with the aim of exchanging all 293
of its stake in Elanco Animal Health (NYSE:ELAN), ears perked up million shares of ELAN. That ratio suggested that there would be
on securities lending desks. Exchange offers reflect the key role that approximately 65 million shares of LLY accepted, or 6 percent of all
securities lending plays in the plumbing of global financial markets, outstanding shares. For an arbitrageur, that 6 percent reflects the
which we’ll discuss in some detail here. This corporate action type is minimum proration or percentage of tendered shares which they
also boon to the securities lending industry itself, driving significant can be sure will be accepted.
loan balances and fees. One industry veteran recently quipped that an
advocacy group ought to be formed to raise awareness of exchange An estimate of minimum proration could be further refined through
offers in corporate boardrooms. analysis of shareholder filings. For example, one could reasonably
assume that the Eli Lilly Foundation would not tender their 118
Elanco Animal Health was spun off from Eli Lilly in September of million shares. Similarly, index holders would most likely be
last year, at which time $1.5 billion of ELAN shares were floated. On precluded from tendering by investment mandate, which accounted
8 February, seeking to complete the divestiture, Eli Lilly offered their for 170 million shares. Removing that 288 million shares would
shareholders an opportunity to tender LLY shares in exchange for suggest a proration factor closer to 8.5 pecent. Further refinement
ELAN shares, the latter offered at a 7 percent discount to incentivise could have been achieved by estimating the portion of shares which
participation. This type of incentive also attracts arbitrageurs who would be tendered out of the 220 milion shares not accounted for
will buy shares with the intention of tendering them. In theory, this in public filings, along with consideration of non-index 13F holders.
position could be hedged by shorting ELAN shares, which would lock In the event, the actual proration factor was 14 percent. For this
in the 7 percent discount. There’s a catch. Not all tendered shares analysis, we’ve used public filings aggregated by IPREO.
will be accepted, so arbs need to estimate the percentage of their
tendered shares which will be accepted and hedge those shares with To simplify the profit and loss associated with the arbitrage
a short position in ELAN. That leaves their position in LLY shares transaction, consider a shareholder who tendered 100 shares.
which aren’t accepted, so they need to hedge that as well by shorting Fourteen shares would have been accepted, for which the
LLY shares, or “boxing” their position. The hedging could also be shareholder would receive Elan shares at a 7 percent discount. At
affected by put options. a price of $127 per share of LLY that would imply a $124.5 profit
($127 x 0.07 x 14), less $2.5 to borrow the ELAN shares to hedge,
The hedging activity on the part of arbitrageurs causes borrow so net $122. For the 86 tendered shares which weren’t accepted
demand for both securities to increase. The real driver of lending the borrow cost of 72 cents per share would be paid for the TNA
revenue comes from the LLY shares; in forgoing the opportunity to shares, for a total cost of $62. The difference of $60 would be the
tender shares, lenders can charge a premium to lend their holdings. arbitrage profit or $0.6 for each share of the original LLY holding.
These shares are referred to as “take no action” or TNA shares and are That’s an idealised version, as it would mean that the proration was
typically auctioned off to borrowers. perfectly estimated, and both sides of the trade were fully hedged.
This example also belies the opportunity for trading the spread
The scale is massive. Fully 44 percent of the outstanding shares of LLY between LLY and ELAN in the days ahead of the final exchange
were tendered, reflecting a market value greater than $57 billion. The ratio being set—calculated using the volume-weighted average
corresponding borrow in LLY shares to hedge that position reached prices for the three days ending 6 March.
$33 billion, while the ELAN borrow balances reached $2.7 billion.
The preceding example, $0.72 was used for the LLY per share
In the press release announcing the exchange offer, Eli Lilly cost for take no action (TNA) shares. A thorough accounting of
noted that the maximum exchange ratio would be 4.5262 ELAN the lending revenues associated with TNA shares is challenging,

22 Securities Lending Times

 Data Analysis

owing to differing mechanics across the industry for recording In recent years, there has been roughly one exchange offer per year
these transactions. which delivered outsized lending returns.

For some lenders, these trades are booked as traditional securities Most recently Fortive’s exchange offer for Altra in September of 2018,
lending transactions where the fee or rebate fully captures the preceded by CBS exchanging shares for CBS Outdoor in November
payment for borrowed shares. Other lenders run these transactions 2017 and duelling P&G and Lockheed Martin exchange offers in the
through a separate system, in some cases a legacy process fall of 2016. P&G was divesting part of it’s holding of COTY, shares
from a time when securities lending software was unable to of which are currently subject to a tender offer from investor JAB
process fees of such magnitude. Bearing in mind some reporting Holding prompting an increase in borrowing ahead of the 15 April
inconsistencies, there is enough data to meaningfully estimate the deadline and may also result in short-term demand for TNA shares.
total revenue and how that relates to per-share payments, which is
how these special situations are typically priced. The broad market rally year-to-date has created a challenging
environment for equity short sellers, which has, in turn, kept a lid on
Breaking the LLY transactions into bands by fee and date suggests borrow demand, particularly for hard to borrow shares. Against that
a weighted average fee to borrow for 12 March at $0.72 per share, backdrop corporate action related securities loans have received
which was paid either just for the 12 or split between the 12 and 13. significant diligence by traders seeking to maximise returns.
There was a small block of transactions done at $1 per share, but
that equates to just 13 percent of balances with fees which could Our view is that having the most complete and up to date securities
reasonably be expected to fully reflect the payment for borrow. It’s lending dataset is a key component to that process.
worth bearing in mind that many shareholders are precluded from
lending 100 percent of their holdings of a given stock, so returns
across actual portfolios were likely lower. The observation of near
parity between arbitrage profits, $0.6, and returns to lending LLY
TNA shares, $0.72, suggests that both sides of the trade effectively
handicapped the proration and resulting profit opportunity.

Exchange offers reflect one of the critical roles securities lending

plays in capital markets, facilitating a smooth execution for corporate
actions. This process also allows shareholders who do not tender to
benefit by lending their shares. Eli Lilly paid a Q1 dividend of $0.65
per share, so revenue from lending TNA shares could have roughly
doubled Q1 income. If all 245 million shares on loan for 12 March
achieved the observable $0.72 per share average, that would imply
$177 million in Q1 revenue for LLY (based on the fees reported, LLY Q1
revenues were $48 million).

www.securitieslendingtimes.com 23
Don’t miss the next issue of SLT
SLT is present at all of the major securities lending conferences
around the world. Make sure you pick up a copy of the latest issue

51st ICMA Annual General Meeting 3rd Edition Impact of SFTR on Securities
and Conference Lending and Reporting Conference
Stockholm London

May 2019 May 2019

15-17 22-24

CASLA ISLA
Toronto Madrid

May 2019 June 2019

30 18-20
28
th

Annual Securities
Finance and Collateral
Management Conference
Transition | Innovation | Future State
18-20 June 2019 | Hotel Puerta América Madrid, Spain

JOIN US IN MADRID
The International Securities Lending Association is delighted to be
returning back after 7 years to Madrid with their 28th Annual Conference.
For full agenda, conference information and registration, please visit
www.isla.co.uk/isla2019

FOR ALL CONFERENCE INFORMATION

isla@eventrock.co.uk | +44 (0) 1708 530034 | www.isla.co.uk/isla2019
Industry Appointments

Comings and goings at Vermeg, Pirum, MarketAxess and more

Wassel Dammak has re-joined Vermeg as Justin Thiron, previously head of North Thiron has also served at EquiLend as vice
director, product strategy, based in Paris. American business development at Pirum, president of business development from
has joined S&P Global Platts as new 2008 to 2016. In addition, he has worked at
Previously, Dammak has held roles at Murex business director. JPMorgan Chase and Northern Trust.
including senior back office consultant and
head of presales team. Based in New York, Thiron served at Pirum LCH has appointed Alex Krunic as head of
from 2017 to 2018 where he was responsible equities, effective May 2019.
He first joined Vermeg in 2000, where he for new client sales, relationship management
served in various roles for seven years before and expanding the global product offering to Reporting into Bruce Kellaway, global head of
leaving to join Murex. the US and Canada. RepoClear, collateral and EquityClear, Krunic

26 Securities Lending Times

 Industry Appointments

will be responsible for EquityClear’s strategy from July 2017 to September 2018. Prior to Prior to Morgan Stanley, Arguedas held senior
within LCH and managing relationships with Santander, Langlois served as lead business roles at Citi and Barclays.
clearing members and trading venues. analyst at MetroBank from February 2016 to
May 2017. Simon Davies has joined the business
Krunic joins LCH from Société Générale, where development team at Pirum and will be
he served as head of global broker-dealer He has also held senior roles at Anchura responsible for representing all products.
services sales and relationship management. Partners, Capco, Credit Suisse and
Previously, Krunic held roles at the National Deutsche Bank. In particular, Davies will have a special focus
Settlement Depository, Citi and J.P. Morgan. on Securities Finance Transactions Regulation
Tiffany Roberts has joined GPP, the prime (SFTR) and repo.
Michael Baker has joined MarketAxess as broking, investor services and wealth
CTO, effective immediately. solutions firm, as head of compliance. Davies is experienced in all facets of the
securities finance industry and most recently
Reporting to Nick Themelis, Baker will Most recently, Roberts served as a senior he served as a senior consultant at The Field
have global responsibility for all software compliance officer for three years at a Effect. Prior to The Field Effect, he was vice
development, which will include strategy, hedge fund. president, global equity services at Deutsche
architecture, development and deployment of Bank.
the trading system. Her appointment is the latest in GPP’s
expansion of its leadership team, following He has also held roles at Brown Brothers
This includes continuing to build innovative the recent hires of Todd Johnson as COO and Harriman and Morgan Stanley.
trading solutions, as well as supporting the James Parker as CRO.
firm’s internal architecture. Davies said: “Having worked closely with
GPP is building out its management structure the industry around managing the extensive
Most recently, Baker served as head of as it enters a new phase of growth after impacts new regulation is having on firms,
enterprise cloud computing at Fidelity celebrating ten years in operation. I’m looking forward to supporting clients in
Investments where he was responsible for leveraging Pirum’s award-winning services to
Fidelity’s transformation to the cloud. Julian Parker, CEO of GPP, commented: help them deal with the challenges ahead”.
“Tiffany Roberts’ appointment signals our
Themelis commented: “Baker’s experience ongoing commitment to growth. Since the Phil Morgan, COO at Pirum, commented:
at both investor and market-making firms start of the year, we have added exciting talent “Given the technical requirements and subject
make him ideally suited to help support and experience to our management team matter expertise demanded by the SFTR
our global institutional buy- and sell-side in Roberts, Parker and Johnson, and I look project, we are excited to secure someone
client base. His knowledge gained from his forward to working alongside them through an with the breadth and depth of knowledge that
more recent work on cloud computing will important phase in GPP’s life cycle.” Simon Davies has.”
be a valuable contribution to MarketAxess’
development process.” Morgan Stanley has appointed Claire Morgan added: “He has an excellent
McKinlay Reilly as vice president of track record of developing strong trusted
Commenting on his appointment, Baker said: securities lending. relationships and I look forward to him
“I’m thrilled to be joining a firm with such a continuing to do this with Pirum’s clients”.
solid track record of technological innovation. Previously, Reilly served as vice president of
MarketAxess is at the meeting point of the trading at BNP Paribas from December 2014 Roland Schoch has resigned from his role
entire fixed income market, supporting the to April 2019. as head of collateral trading and collateral
needs of all participants across the trading management at Bank Julius Baer to pursue
lifecycle. The technology that MarketAxess At BNP Paribas, Reilly was responsible for new challenges.
is developing is driving greater efficiency and reinvestment for global institutional investor
automation in fixed income and I’m looking clients, equity and fixed income trading as well Schoch has more than 30 years of experience
forward to being a part of that evolution.” as borrower relationship management. in the securities lending industry.

Consolo has appointed James Langlois Reilly also served at DataLend within client Schoch also served at Swiss Bank Corporation,
as a Securities Financing Transactions relationship management and sales. UBS Switzerland and Bank Vontobel.
Regulation (SFTR) analyst.
Morgan Stanley has also appointed Carmen Jong Frochaux will replace Schoch as head of
Previously, Langlois served as project Arguedas as executive director of bank collateral trading and collateral management
manager and business analyst at Santander resource management. with immediate effect. SLT

www.securitieslendingtimes.com 27
9TH Annual CASLA Conference
on Canadian Securities Lending
May 3 0, 2019 | The O mni K ing Edward H otel Toronto

Join our industry experts discussing recent trends

and opportunities in the Canadian securities lending market
• Economic Update
• Regulatory Funding & Technology
• Industry Leaders’ Discussion
• Diversity in Securities Finance

info@canseclend.com | www.canseclend.com/events/