SunGard has released an interview with Tim Smith, SVP of SunGard ASTEC Analytics, on transparency in the securities finance market. The interview gets at some points that have been out in the market for a while but still need further definition for both market participants and regulators. Highlights of the podcast include:
– It is very difficult to apply the same requirements of transparency to securities lending that is presumed for equity markets or other trading activities. Securities loans are an arrangement, not a transaction. “How many other trading activities are there where every term and condition can change over time?” The same rules of one price or one rate don’t apply.
– In securities finance in 2011, transparency means different things to different people. For regulators, transparency means oversight. Participants each have their own views: for example, beneficial owners might want transparency on their returns, program policies and their fee splits. Transparency in Asia could be about new markets and regulations while transparency in Europe could mean on fee structures.
– Demands for transparency have led to “more details that the industry has struggled to provide without giving away competitive advantage.”
The original podcast is here.