Podcast Episode 3: Taskforce Stock Lending Workstream
Stock Lending Workstream
In this third Podcast one of the industry’s leading experts on Stock Lending and Borrowing, Roy Zimmerhansl discusses the work he has taken part in as lead in the UK Technical T+1 Taskforce stock lending workstream.
The activity of efficient stock borrowing and lending is vital to maintain liquidity in capital markets. It is especially important for less liquid midcap stocks, where the ability to borrow is imperative, to not only enabling buyers and sellers to be satisfied, but also narrowing spreads for the execution of the transaction.
In this podcast Roy discusses the problems firms will face as a lender or as a borrower. The difficulties of Stock Loan recalls is described and how the activities of lending and borrowing will face challenges to ensure efficient continuance of this major function of capital markets.
If the challenges to maintain existing stock bowing and lending efficiency under domestic settlement for T+1 is problematic, then the international business is even more so! Time zone issues and cut off times at CSDs around the world will be making the operational performance come under extreme pressure. In this area FX settlement also can be added to as requiring an enterprising solution.
Market liquidity is talked about with concerns raised about liquidity in midcap stocks. The issues of introducing automation within the whole stock borrowing and lending supply chain and how technology and changes in transaction behaviour might be required for overcoming recalls are also discussed.
Roy Zimmerhansl is the Practice Lead at Pierpoint Financial Consulting, a leading securities finance consultancy. With decades of experience in securities finance, collateral management, and significant risk transfer, Roy is a recognised expert in the field. Currently, he leads the Stock Lending Working Group for the UK Accelerated Settlement Taskforce.
Roy has served on the boards of industry associations in Europe and Asia, participated in the Bank of England Securities Lending and Repo Committee, and acted as an expert witness in legal cases in both the UK and US.
Leave a Reply
You must be logged in to post a comment.