Commentary

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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Number of views (2396)

Sunday, November 28, 2021

U.S. Stock Loan "Ticker": A Gift to Beneficial Owners?

SEC's New Disclosure Regime to Fix "Information Assymetry"

Author: Ed Blount

Make no mistake. The new 10c-1 disclosure proposal by the SEC is an Investor Protection Rule on steroids. It is also a profound escalation of regulatory support for Investor Self-Protection. Nothing less than a near real-time stock loan ticker will result, if enacted, that is intended to reveal U.S. loan rates and liquidity to the investing public for the first time in history.

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Number of views (1912)

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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Number of views (1739)

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 (1839)

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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Number of views (1743)
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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​