Commentary

Monday, December 13, 2021

“Wisely and Slow; They Stumble that Run Fast.”

Finding a Better Value Proposition for the SEC's Sec Lending Disclosure Rule

Author: David Schwartz J.D. CPA
The SEC has proposed a radical and potentially very costly reporting regime for securities finance transactions to increase transparency "to brokers, dealers, and investors."  While there is no requirement for the Commission to discuss or examine the economic effects of regulatory alternatives, in this case, they have included some alternatives it could consider to the reporting structure they propose, presumably to focus potential commenters...
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Categories: All, Commentary, Disclosure Regimes, Cross-Post

Tags: securities lending, Capital Requirements, Counterparty

Tuesday, November 30, 2021

Who Bears the Cost of the SEC's Securities Lending Disclosure Proposal?

The Winners and Losers in Mandatory Transparency

Author: David Schwartz J.D. CPA
The Securities and Exchange Commission (SEC) recently proposed a new reporting regime to increase transparency and efficiency in the securities-lending market. The proposal is a sweeping change and a somewhat novel approach to bringing securities lending out of the dark. While the merits of the proposal's approach will no doubt be thoroughly scrutinized and debated, so should its cost and who will bear that cost. While the potential benefits would seem to flow to all...
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Categories: All, Commentary, Disclosure Regimes, Cross-Post

Tags: securities lending

Monday, November 15, 2021

New Trends in Data Ownership

How Data Trusts Can Transform Securities Finance.

Author: David Schwartz J.D. CPA
Certain challenges in securities finance can only be met with better data and newer data models. Market regulators now coping with investor demands for ESG-compliance will have to monitor the disclosures of regulated entities by combing through vast pools of stock loan and proxy voting data. Bank custodians and brokers, if tasked with validating the social propriety of their stock loans, will have to dive deep into customer profile data, deeper than either regulators or vendors can today...
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Categories: All, Commentary, Cross-Post

Tags: Proxy Voting, datasets, cross-border, Compliance, ESG

Monday, November 1, 2021

A Twenty-Year Journey to Transparency

Securities Lending Versus Proxy Voting

Author: David Schwartz J.D. CPA
Securities lending has proven the most challenging aspect of shadow banking for regulators to bring under a regulatory rubric. One of the most vexing aspects for regulators is proxy voting by securities lenders or, more particularly, the lenders' decision processes about whether to recall lent securities to vote their proxies and forego the lending income. The calculus about whether to forego lending income in favor of exercising the right to vote relies on so many factors that...
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Wednesday, June 2, 2021

Moving ESG Beyond Policy into Practice

Bankers Seek Common Ground with Politicians

Author: David Schwartz J.D. CPA
Accountability in voting is in the news, and nowhere more so than on Wall Street. Through their U.S. credit policy association and its Asian counterpart, Bankers have responded to suspicion among critics that problems abound in the murkiness of the proxy voting practices of asset managers for large pensions, mutual funds, and other institutional investors. With the launch of the "Global Framework for ESG and Securities Lending (GFESL)," the partnership by the two...
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Categories: All, Commentary

Tags: ESMA, cross-border, ESG

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Journal Commentaries

 

Keep Regulation Functional (October 2008)

CSFME’s Executive Director Ed Blount interviews SEC Chairman Chris Cox.
American Banking Association Banking Journal
https://www.questia.com/library/journal/1G1-187494664/keep-functional-regulation-how-financial-regulation

 

The Bear Market Posse, or Counterparty Risk Management during the Recent Turmoil (Sept.  2008)

by Ed Blount
The RMA Journal, v91n1, 28-32, 5 pages Sep 2008.

 

Searching for New Paradigms at BIS (July 2008)

by Ed Blount
Unexpected deficiencies in bank capital after recent market turmoil has regulators rethinking aspects of Basel II and “value at risk.”  
American Banking Association Banking Journal  
https://www.questia.com/library/journal/1G1-181991450/searching-for-new-paradigms-at-bis-market-turmoil

 

Will Basel II Affect The Competitive Landscape? (September 2003)

By Ed Blount
Newly elected Basel Committee Chairman Caruana, Governor of the Bank of Spain, gives his views on the revised Basel capital accord, relative to its potential effects on competition and risk management in banking markets.
American Banking Association Banking Journal
https://www.questia.com/read/1G1-108008773/will-basel-ii-affect-the-competitive-landscape-the​