eSecLending’s Peter Bassler and Simon Lee on why participate in Finadium’s Investors in Securities Lending Conference

We spoke with Peter Bassler and Simon Lee at eSecLending to hear why their firm is sponsoring Finadium’s Investors in Securities Lending Conference this April: “coming to this event will demystify and clarify how this product can benefit virtually any portfolio.”

Why has eSecLending decided to participate in the Finadium Investors in Securities Lending (FISL) conference?

Simon Lee: The regulatory landscape affecting the securities lending marketplace has shifted significantly in recent years and continues to drive the evolution of the business. In bringing together a wide cross-section of market participants, we believe that the FISL Conference will provide a platform for an informed, transparent debate and a greater understanding of the issues affecting the industry today.

Why do you think clients will benefit from attending?

Lee: A greater understanding of the issues affecting the marketplace leads to more informed decision making, enabling beneficial owners to effectively adapt to this evolving business.

Do you see new opportunities for clients in financing markets?

Lee: Yes, there are a number of trade opportunities available to beneficial owners to enhance their securities lending programmes, including lending in new markets, engaging in peer-to-peer (P2P) transactions and entering into more structured trades, such as term lending.

Are there specific types of professionals who would benefit from a greater understanding of this market, and who should be sure to attend the conference?  

Peter Bassler: Securities lending touches many professionals within an asset manager or an organization that lends securities directly. The function that has the most to gain from this marketplace is portfolio management. Understanding the dynamics of the short side of the market and how that can be leveraged for investor benefit should be a priority for any portfolio manager.

Securities lending is a pure fund shareholder/beneficiary product. It is often misunderstood, and coming to this event will demystify and clarify how this product can benefit virtually any portfolio.

Programs can be tailored to accomplish many different goals, and securities lending programs don’t need to be an all or nothing proposition. The product can also help facilitate long/short strategies and can be a cost effective form of leverage as traditional leverage tools become more expensive.

In addition to portfolio managers, any other function that touches the product can benefit from this conference, whether they work in operations, fund administration, legal or corporate governance. The product is unique in that it touches virtually every function within an investment firm.

What Should Beneficial Owners be Focusing on in 2017?

Bassler: New market dynamics demand that beneficial owners take a fresh look at guidelines that may be outdated (i.e., types of counterparties, cash guidelines, non-cash collateral acceptability and breadth, etc.). Beneficial owners should also review whether the right people are involved with the lending program at their organization. This product touches many departments, and it may be worth having working groups that assess the firm’s participation (i.e., tax, trading, legal, operations and accounting, etc.).

Beneficial owners should also assess how to increase revenue from their lending program in a risk-controlled environment and better understand how indemnification is impacting their lending agents’ capital charges and single counterparty credit limits, as well as how they impact their lending program.

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