May 2010
Spotlight on Pan Asian securities lending conference with Rob Chiuch
Earlier this spring, Rob Chiuch, executive director and head of trading, global securities lending at CIBC Mellon and president of the Canadian Securities Lending Association (CASLA), represented CASLA at the seventh annual Pan Asian Securities Lending Association’s (PASLA) conference in Hong Kong.
The conference provided an opportunity for securities lending experts and industry participants from around the world to share best practices and provide their perspectives on many issues that the industry faces in today’s markets, ranging from risk, reward, liquidity and taxes, and the challenges facing the financial industry in the future.
Rob participated in a securities lending expert panel discussion with representatives from PASLA, the Australian Securities Lending Association (ASLA), the Risk Management Association’s Committee on Securities Lending (RMA) and the International Securities Lending Association (ISLA).
In this article, Rob discusses highlights of the conference, the expert panel and his thoughts on CASLA and current market situations.
What were some of the important topics discussed at the conference?
Some discussions that were particularly noteworthy included an International Organization of Securities Commissions (IOSCO) update on financial market regulation. Market participants and regulators shared views on supervision, regulatory coordination, pending rules and legislation. More specifically, there appeared to be general consensus (consistent with a more global view) regarding heightened sensitivity around issues including contract performance, stress testing, counterpart selection and evolving settlement procedures.
Of particular concern was the emerging rush to global legislative changes and potential misalignment between jurisdictions. It’s clear that alignment of objectives and good communication between stakeholders has never been more important.
What was the benefit of gathering international securities lending associations together?
This conference provided a forum for industry leaders across the world to meet and discuss best practices, learn from one another’s experiences and build relationships between participants that will encourage future collaboration. CASLA (the first Canadian organization of its kind) was able to showcase itself as an advocate in the Canadian marketplace. It provided a great opportunity to showcase our mission of ensuring the long-term viability of the Canadian securities lending industry.
It also gave us the opportunity to highlight CASLA’s organizational model. CASLA took a new approach by deliberately seeking out a wider breadth of indirect industry representation for its executive and sub-committee members, with the intent of finding a greater and more robust span of expertise and viewpoints. CASLA includes external professionals in the legal, tax and regulatory fields. Our approach to creating an association in this fashion was well-received among the other established securities lending associations, and some shared an interest in following this model in the future.
What specific observations and projections did the panel speak to?
There was general consensus that Pan Asian markets are rebounding, with growing evidence that participants are again expanding their programs. There are signs of life in initial public offerings, mergers and acquisitions, product development, capital spending and hiring – in many cases geared at least in part towards China.
The velocity of legal and regulatory change in global capital markets businesses implies a growing complexity that highlights the need for education and transparency. All panellists shared views that media and politics cannot be ignored. The need for associations to align globally and coordinate their efforts in a clear and thoughtful way could not be overstated. Last but not least, it was a proud moment when the moderator highlighted Canada as, currently, one of the best performing securities lending markets in the world1 -- a notion with which I do not disagree.
By Rob Chiuch, executive director and head of trading, global securities lending
1. Based on data provided by Data Explorers
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