02 February 2018
Fort Lauderdale
Reporter: Zsuzsa Szabo

IMN: beneficial owners can lend, but they should not bend

The most important factor for beneficial owners to consider before lending is to know who is the borrower, according to conference speaker Sudha Datta, president of SL&C Consulting.

During a panel at the IMN's 24th Annual Beneficial Owners' International Securities Finance & Collateral Management conference, Datta advised beneficial owners on how to safeguard their assets and avoid unnecessary risk.

Datta suggested that this can be done by looking into the borrower’s credit rating, obtaining information about their balance sheet or conducting own analysis.

According to Datta, indemnity is critical to consider before starting the securities lending programme.

Datta notes that agent lenders sometimes don’t specify what is covered in the indemnity.

Another important element for a beneficial owner to deal with is whether cash or non-cash will be accepted as collateral.

Setting the duration of lending is another issue not to neglect, according to Datta.

He also recommends that beneficial owners should make sure they have a strong legal and service level agreement with the lending agent in which all the conditions are clearly set.

He reminded attendees of the panel that the responsibility lies in the hands of the beneficial owner.

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
BoE release consultation on a new rule for central counterparties
16 February 2018 | London | Reporter: Jenna Lomax
BoE states that this proposed rule of written notice would “support the UK Government’s approach to the implementation of the EU Network and Information Systems Directive”
ASX sees 5.8 percent increase in collateral management activity
16 February 2018 | Sydney | Reporter: Jenna Lomax
The increase in the use of derivatives and OTC was due to a rise in futures trading, OTC clearing and collateral management activity
SBL Network bolsters its P2P securities lending team
16 February 2018 | London | Reporter: Jenna Lomax
SBL Network Limited has hired Charlotte Clout, reporting to Tammy Phillips, CEO at SBL
Citi’s agency lending sales chief departs
16 February 2018 | New York | Reporter: Drew Nicol
Citi’s Americas head of sales for it’s agency securities lending, collateral management, and separate account cash management businesses, Jeff Bonaldi, has left to pursue a number of entrepreneurial ventures
SIFMA testifies on legislative proposals regarding derivatives
15 February 2018 | Washington DC | Reporter: Brian Bollen
SIFMA has testified to the US House of Representatives Committee on Financial Services Subcommittee on areas that could make regulations more risk-sensitive, less complex and clearer
More than 35 percent of investors asked are planning to add to their European exposure in 2018
ECB rings collateral changes
14 February 2018 | Frankfurt | Reporter: Brian Bollen
The European Central Bank has issued a series of amendments relating to the Eurosystem’s monetary policy implementation