02 August 2017
Reporter: Mark Dugdale

ISLA welcomes asset segregation opinion

The International Securities Lending Association has welcomed an opinion that will clarify asset segregation and the application of depository rules to central securities depositories.

The opinion of the European Securities and Markets Authority (ESMA), issued in late July for the consideration of EU authorities following a three-year consultation and evidence gathering process designed to ascertain the challenges and costs arising from the current framework on asset segregation, will have a “positive impact”.

ESMA’s clarifications cover the asset segregation requirements of depositories of UCITS or alternative investment funds and the the application of depository delegation rules to central securities depositories.

According to ISLA, the ESMA opinion stressed that the EU framework should ensure that assets are clearly identifiable as belonging to the UCITS or alternative investment fund, consistent with any reuse.

Investors must also receive adequately robust protection by avoiding the ownership of the assets being called into question in case of the insolvency of any of the entities in the custody chain

ISLA said in a note to members: “ESMA concludes that only minimum EU-wide segregation requirements should be prescribed, leaving room for stricter requirements or different account structures if national laws in specific member states make them necessary. ISLA recognises the positive impact this will have, and is the culmination of significant effort by ISLA and its members working together to achieve this successful outcome.”

“However, it is important to note success will be subject to how this opinion will be adopted by member state into local laws.”

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Pension plans accuse banks of anti-competitive behaviour
18 August 2017 | New York | Reporter: Drew Nicol
Three US pension plans have accused six of securities lending’s biggest banks of blocking nascent platforms and keeping the market for themselves
Repo passes judgement on MMF collateral rules
18 August 2017 | Brussels | Reporter: Drew Nicol
Thirteen industry stakeholders made up of major global banks and industry associations responded, with largely positive feedback on ESMA’s proposals
UBS expands securities lending team
17 August 2017 | Zurich | Reporter: Drew Nicol
UBS’s has regained Iwan Lichtsteiner as a member of its fixed income, securities lending and financing team, effective from October
Clearstream angling for central role in China’s market growth
17 August 2017 | Luxembourg | Reporter: Drew Nicol
Deutsche Börse Group and Clearstream representatives will be present at the Shanghai International Financial Advisory Council being at the end of August
Whitebox Advisors chooses Broadridge suite solution
17 August 2017 | New York | Reporter: Drew Nicol
Whitebox Advisors has mandated Broadridge Financial Solutions to transform its technology platform into a fully integrated, hedge fund operation
Clearstream confirms rates for September
16 August 2017 | London | Reporter: Jenna Lomax
The market infrastructure provider charges different rates for equities and debt, and on a per currency basis
CloudMargin unveils microsite for OTC derivatives
15 August 2017 | London | Reporter: Jenna Lomax
The new microsite, designed by UK-based design agency Eight Arms, was created to help financial institutions globally become accustomed to the new margin rules and other regulations affecting their collateral management functions