Commentary

Sunday, November 21, 2021

SEC Proposes Sweeping Securities Lending Disclosure Rules

Bringing Securities Lending Out of the Dark.

Author: David Schwartz
On November 18, 2021, the Securities and Exchange Commission proposed broad disclosure rules intended to "provide transparency in the securities lending market." As directed by the Dodd-Frank Act, the Commission proposed these rules to (1) supplement publicly available information, (2) close data gaps in the securities lending market, (3) minimize information asymmetries between market participants, and (5) provide market participants with access to pricing and other...
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Monday, November 15, 2021

New Trends in Data Ownership

How Data Trusts Can Transform Securities Finance. Part I.

Author: David Schwartz
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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Number of views (130)

Monday, November 8, 2021

Exposing the Rogue Traders

The Case for a Cross-Border Stock Loan Registry, Part II

Author: Ed Blount
Master Criminals don’t usually confess in public. If prosecutors’ charges are true, Sanjay Shah is the leading figure in the largest reported tax swindle in history. Yet, Mr. Shah, unbowed, pleading his case to reporters, has openly admitted to borrowing the assets of widows and orphans in one country to kick-start a pyramid scheme of dividend capture trades, so as to swindle widows and orphans in other countries. Mr. Shah’s attorneys argue that his trades were not illegal....
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Number of views (245)

Monday, November 1, 2021

A Twenty-Year Journey to Transparency

Securities Lending Versus Proxy Voting

Author: David Schwartz
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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Number of views (193)

Monday, October 25, 2021

Assembling the Market Posse

The Case for a Cross-Border Stock Loan Registry, Part I

Author: Ed Blount
We’ve all been there, having drinks after work with an important client visiting from overseas. My most memorable time was at the very beginning of my career on Wall Street. The client was a trader from the South African branch of Jos. Sebag & Co., a London firm more than 100 years old when he and I met in 1975 at the upscale bar, Michael II. The firm and the restaurant have long since vanished, but at the time Sebag was the most active account for First National City Bank’s...
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Number of views (905)
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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​