Thursday, April 21, 2016

FSOC Asks for Enhanced and Regular Data Collection for Securities Lending

In their April 16, 2016 report, Review of Asset Management Products and Activities, the Financial Stability Oversight Council (FSOC) requested that regulators make coordinated and permanent efforts to collect more data on securities lending. Noting that that current data collections do not provide regulators and policy makers with enough information to even know the size of the market for securities lending, the FSOC urged enhanced and regular data collection and reporting, as we all as interagency data sharing regarding securities lending activities.  

 

The FSOC requested proposals by the SEC to collect more detailed information on the characteristics of securities lending activities undertaken by registered funds, including data on principal, collateral, counterparties, reinvestment practices, and indemnification agreements.  In addition to better data collection on securities lending, the FSOC also recommended that the securities lending data collection efforts could be integrated with a similar pilot initiated to collect data on the bilateral repo market to allow for more complete analysis of secured financing transactions. 

 

The FSOC is also concerned with the potential effects securities lending activities outside of the U.S. may have on domestic financial stability.  Consequently, the March 16, 2016 publication encourages member agencies to coordinate with key foreign counterparts on enhanced securities lending data collection across jurisdictions. 

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