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, 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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Categories: All, Commentary, Cross-Post

Tags: securities lending, Shadow Banking

Tuesday, October 20, 2020

Squaring ESG with Securities Lending

Compliance without Knowing the Borrower's Purpose - Is it Possible?

Author: David Schwartz J.D. CPA

Sustainable investing is becoming more important to investors when creating portfolios. As a result, institutions often follow policies with formal environmental, social, and governance (ESG) factors to guide their investments. They commit substantial resources to ESG research and produce comprehensive reports about their compliance.[1] But then the same institutions give away their proxy votes when they lend securities for fees to cover their bank charges. And the loans of those securities...

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Categories: All, Commentary, Disclosure Regimes, Cross-Post

Tags: securities lending, Corporate Governance, Financial Innovation, DLT

Wednesday, September 30, 2020

Alarm Raised on Stock Loans for "Withholding Tax Schemes”

Findings Point to a New Role for Emerging Fintech

Author: David Schwartz J.D. CPA

European commissioners are reviewing a study from their securities and market authority (ESMA) that includes a recommendation for new laws to combat unfair trading practices and an extended remit for National Competent Authorities (NCAs) to conduct snap audits of securities loans and transactors. Loans deemed to be suspicious would prompt an inquiry to determine penalties for unfair strategies and inappropriate beneficiaries. However, useful audit results may be doubtful based on our...

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Categories: All, Commentary, Cross-Post

Tags: securities lending, innovation, datasets, ESMA, cross-border, Empty Voting, Financial Innovation, Blockchain, DLT, RMA

Commentary

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

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

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

The Winners and Losers in Mandatory Transparency

Assembling the Market Posse

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

Squaring ESG with Securities Lending

Compliance without Knowing the Borrower's Purpose - Is it Possible?

Alarm Raised on Stock Loans for "Withholding Tax Schemes”

Findings Point to a New Role for Emerging Fintech

Journal Commentaries

Keep Regulation Functional (October 2008)

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

Searching for New Paradigms at BIS (July 2008)

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