Sec lending liquidity concern for beneficial owner
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Sec lending liquidity concern for beneficial owner 14 November 2016New York Reporter: Drew Nicol
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US beneficial owner MetLife has cited liquidity risks relating to its securities lending programme as one of the potential hurdles that could scupper its plans for a $3 billion common stock repurchase initiative.
The life insurance company also listed difficult conditions in the global capital markets, including the UK’s withdrawal from the EU, other disruptions in Europe and possible withdrawal of one or more countries from the eurozone.
In a note to investors on its investment strategy going forward, Metlife also stated that existing regulation and the potential for “comprehensive financial services regulation reform, including potential regulation of MetLife as a non-bank systemically important financial institution (SIFI)”, featured as a significant factor for investment disruption.
MetLife is currently fighting its SIFI designation in court. The Department of Justice has lodged an appeal against a decision to rescind it with the US Court of Appeals for the DC Circuit.
The Dodd-Frank Act was highlighted as a specific cause for concern, although uncertainty around the future of the legislation was compounded by last week’s shock US election result that saw Donald Trump, a vocal Dodd-Frank sceptic, claim victory.
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