Advocacy isn’t solely about speaking to regulators, ministries and parliamentary bodies, but also advocating to and with market participants, said one panellist at the ISLA 30 Conference.
Set against the backdrop of the end of the current EU parliament and political cycle in Brussels, the first panel of the ISLA 30 Conference reviewed in-flight and imminent regulations and the implications for advocacy.
Panellists discussed the digital landscape, primarily from the perspective of the International Securities Lending Association’s (ISLA’s) strategy and the achievements of its various working groups and streams.
ISLA achieved ‘a huge win’ at the beginning of 2023 when the UK’s Financial Conduct Authority (FCA) made a public statement in response to the FCA’s discussion paper on Sustainability Disclosure Requirements (SDR) and investment labels.
The FCA stated that it did not see why securities lending and ESG could not be compatible and supported the application of ESG standards in driving sustainable lending and financing within the functioning of wider capital markets.
ISLA has been attempting to engage with regulators about the intersection of ESG and securities lending for a long period of time.
As a main focus for underlying lenders, the Association has been in conversation with the FCA regarding the application of sustainability criteria in shaping collateral eligibility. The FCA is expected to release its official policy statement on this subject in Q3 2023, according to a panellist.
Referencing the Basel rules, one panellist indicated that there was a major focus on the new capital requirement rules in the EU, where negotiations between the EU Parliament and the Council are soon to come to a close.
ISLA responded to the Bank of England (BoE) consultation on the application of Basel III rules in March 2023 and is now awaiting the release of the Federal Reserve’s proposal in the US, which is to appear later in 2023.
Headline regulations including SFTR and CSDR have also continued to be major catalysts for change in the market — and have provided the foundations for a wider focus on regulatory reporting and settlement efficiency that will feature more prominently in other panel discussions at this year’s ISLA annual conference in Lisbon.
