ISLA is forming a new digital working group, which will initially help to form responses to consultations from the European Commission and Bank of England with a view to then focus on the Common Domain Model (CDM) and other fintech topics as discussed in a recent ISLA paper on securities lending digitization.
On 3 April 2020, the European Commission (EC) launched a consultation on its digital finance strategy. As set out in the Commission’s work programme, given the broad and fundamental nature of the challenges ahead for the financial sector, it will propose a new digital finance strategy/Fintech Action Plan in Q3 2020, setting out a number of areas that public policy should focus on in the coming five years.
Similarly, the Bank of England (BoE) published a discussion paper on 7 January 2020, to mark the launch of their review to explore a transformation of the hosting and use of regulatory data over the next decade” to “seek ways to decrease the burden on industry and to increase the timeliness and effectiveness of data in supporting supervisory judgements”.
Closely aligned to both of these initiatives and in September 2019, ISLA launched a joint paper with Linklaters, looking at the increasing complexities surrounding the securities lending market in terms of operational flows and systems, as well as pervasive and onerous regulatory imperatives. Drawing upon the experience of other markets, the paper considered how technological change in the form of digitalisation and common data representations may provide the opportunity and framework to standardise and streamline many inefficient and costly legacy processes and practices.