It’s been a frustration that UCITS funds say they can’t accept pledge in securities lending, and this is another factor in keeping UCITS on the sidelines of the market in the name of Europe’s Efficient Portfolio Management. However, we find conflicting evidence on the rules from the Level 1 text, an ESMA consultation and recent comment letters. There’s also a clear path forward to resetting the playing field in favor of UCITS accepting pledge if regulators are willing to take action. This could lead to a further breakthrough in UCITS fund participation on securities lending CCPs.
This content requires a Finadium subscription. Articles with an unlocked symbol can be accessed with free registration. Log in or create a free account by signing up here..
