Pierpoint Perspective$

Jeroen Bakker, Pierpoint Benelux Consulting Lead, delves further into the issues that are important for borrowers when they are determining where to source assets from.

Check out Jeroen's latest blog post on the short squeeze that drove Volkswagen into briefly reaching the position of the largest company in the world as measured by stock market capitalisation. Read the blog here

Show Timeline:

Time Comment

02:40 Flexibility - Ease of trading, automation and onboarding

11:57 Breadth of automated trading - General Collateral only?

15:22 Collateral flexibility

24:22 Equity collateral considerations in volatile markets

27:10 Triparty collateral

28:22 ETFs as collateral

30:45 Term transactions

39:24 Supply - What is the single biggest issue?

40:25 How do mid-sized or smaller lenders compete?

44:25 Where do domestic lenders fit in?

46:45 Problem of portfolios using the same benchmarks

49:33 Exclusives

54:33 Synthetics

01:05:29 Closing thoughts from Jeroen

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Gary Klahr, Associate Director, EquiLend is interviewed by Roy Zimmerhansl and talks about standardisation, operational efficiency, EquiLend’s mission and their support for the Pierpoint white paper series “A Journey Through Time: Paper 1 – Building on the Past”

White paper available here: A Journey Through Time: Paper 1 – Building on the Past

Check out Roy’s MUST READ articles at the EquiLend Insight page: https://www.equilend.com/news/insight/

Follow EquiLend:

https://www.equilend.com/

Twitter: https://twitter.com/EquiLend

LinkedIn: https://www.linkedin.com/company/equilend/

Show Timeline:

2:05 Why should people listen to this episode?

3:05 Problem resolution – the way we were

5:38 Twenty First Century Twins – Standardisation and Automation

8:25 The shift to exception management

10:25 SFTR forces change

12:00 Real Time in the trade lifecycle

14:45 SFTR sets new levels for standardisation, but more work is required

19:20 It takes two to tango

20:57 Where do we go from here? Real Time

22:33 Investing in Operations

25:08 Gary’s closing thoughts

26:57 Episode wrap-up

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Mark Faulkner Co-Founder Credit Benchmark addresses Basel IV issues for Securities Finance with podcast host Roy Zimmerhansl, Practice Lead at Pierpoint Financial Consulting Ltd. 

Stories mentioned in the podcast/other relevant material:

Basel IV Rules

CCP Network Creditworthiness

Sub Custodian White Paper

CCP Monitor

Mid-July 2020 Financial Counterpart Monitor

Securities Finance Use Case Menu

Follow Credit Benchmark:

https://www.creditbenchmark.com/

Twitter: https://twitter.com/CreditBenchmark

LinkedIn: https://www.linkedin.com/company/credit-benchmark/

Show Timeline:

4:13

Why should people listen to this episode?

6:32

Why don’t so many entities already have credit ratings?

9:30

What do Credit Ratings really represent?

12:50

Bank of England/HM Treasury and Credit Benchmark

19:17

‘The challenges of aggregation’ and ‘Group decisions are more effective’

24:13

How is Credit Benchmark different / complementary to Credit Rating Agencies

26:46

Piping securities lending transactions from hedge funds through to beneficial owners

29:27

Basel IV challenges for securities finance

35:13

Economics drives behaviour

39:25

Closing thoughts from Mark

Follow Pierpoint:

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Podcast Host Roy Zimmerhansl, Practice Lead at Pierpoint Financial Consulting Ltd reviews securities lending revenues for the first six months of 2020 using IHS Markit data as the source for his comments. 

Stories mentioned in the podcast:

IHS Markit firs half 2020 snapshot: https://ihsmarkit.com/research-analysis/securities-finance-snapshot.html

Lansdowne retreats from shorting: https://www.bloomberg.com/news/articles/2020-07-07/lansdowne-to-shut-main-hedge-fund-in-shift-away-from-shorting (subs may be required)

Sloane Robinson to close hedge fund: https://www.bloomberg.com/news/articles/2020-07-06/hedge-fund-sloane-robinson-to-shut-after-more-than-two-decades (subs may be required)

Andy Dyson interview: https://www.pierpoint.info/podcast/episode/4407c2ec/interview-with-andy-dyson-ceo-isla

Show Timeline:

02:00 The Numbers

07:10 What went right?

09:57 Where do we go from here?

15:58 Borrowers become more choosy

17:55 ISF/ISLA webinar series

19:21 Final Thoughts

Follow Pierpoint:

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LinkedIn www.linkedin.com/company/pierpoint-financial-consulting-ltd

Twitter @pierpointfc

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Episode Guest: Ali Kazimi, Managing Director, Hansuke Consulting Ltd talks tax with host Roy Zimmerhansl

Ali provides listeners with a tour de force on key current issues for tax in securities finance as well as the past, present and future outlook.

3:01 Why should people listen to this podcast?

4:37 Securities lending and tax - uneasy bedfellows?

8:02 Taxation - marrying accounting and legal treatments

11:11 Sen Carl Levin - US Senate Report on Dividend Tax Abuse

22:30 A change in approach for Double Taxation Agreements

25:36 From tax guru to felon - justified or scapegoat?

29:50 The Danish Tax Authority (Skat) claim for tax abuse

35:00 How some firms and tax authoriites are now approaching trading around dividend dates

38:42 Reputational Risk and Beneficial Owners

48:03 Cum-Ex and Cum-Cum transactions

55:06 EBA report on Dividend Arbitrage and financial crime

1:00:56 DAC 6 and what it means for investors

1:03:10 Global challenges and the top-down approavh for tax principles

1:04:46 Hansuke Consulting's diverse and inclusive series of webinars

1:10:30 Closing thoughts from Ali

Stories mentioned in the podcast:

US Senate Report on Dividend Tax Abuse

https://www.hsgac.senate.gov/imo/media/doc/091108DividendTaxAbuse.pdf

Danish tax authority claim

https://www.caymancompass.com/2020/05/04/danish-tax-office-seeks-cayman-information-in-alleged-fraud-scheme/

Dutch tax authority pursues Morgan Stanley

https://news.bloombergtax.com/daily-tax-report-international/morgan-stanley-may-owe-42-million-in-dutch-dividend-tax-case

Follow Hansuke:

Hansuke Consulting Ltd: www.hansuke.co.uk

LinkedIn: https://www.linkedin.com/company/hansuke-consulting/

Follow Pierpoint:

https://www.pierpoint.info

LinkedIn www.linkedin.com/company/pierpoint-financial-consulting-ltd

Twitter @pierpointfc

Facebook: www.facebook.com/pierpointfinancial

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In this podcast, Pierpoint partners John Arnesen and Roy Zimmerhansl discuss the operational framework that is integral to the securities lending business both today and looking forward.

1:05   Why should people listen to this programme?

1:49   Are the terms “Front Office” and “Back Office”

still relevant?

4:37   Trade Execution vs Trade Management

8:32   Has Coronavirus changed the appetite for Outsourcing?

12:45 CSDR and the potential for new buy-in activity for Beneficial Owners and third-party fund managers

26:32 Lifecycle as opposed to pre- and post-trade

32:08 Should there be penalties for ‘natural’ fail transactions?

38:50 John’s closing thoughts

You can follow John at https://www.linkedin.com/in/john-w-arnesen-3a29079

You can follow Roy at https://www.linkedin.com/in/royzimmerhansl

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LinkedIn www.linkedin.com/company/pierpoint-financial-consulting-ltd

Twitter @pierpointfc

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and Updates

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Episode Guest: Shaun Murray, Managing Partner at Margin Reform interviewed by podcast host, Roy Zimmerhansl

In this podcast Shaun provides commentary on UMR and how firms can make the most of the deferred implementation of Phase 5, the application of DLT to address documentation delays. The “Wheel of Pain” and more

3:11

Why should people listen to this programme?

3:43

UMR update

10:49

Intra-group trading issues and non-netting jurisdictions

14:50

Collateral Guru or Collateral Czar?

19:15

What should firms do now given UMR Phase 5 delay?

26:00

The impact of legal work on UMR progress and the potential application of DLT

33:31

Amazing stats on volumes through market volatility in March/April 2020

37:50

Shaun's advice to Phase 5 firms

39:30

Clearing optimisation

47:10

The expanding collateral universe

50:33

CSDR and collateral

53:50

The "Wheel of Pain"

59:25

Margin Reform webinar

1:01:32

Shaun's closing message

You can follow Shaun and Margin Reform at

Margin Reform webinar "They've extended UMR, again. What can you solve now?" 2nd July 2020 - 3:00pm (UK) - Register Here

Website: www.marginreform.com

Twitter: @marginreform

LinkedIn: https://www.linkedin.com/company/margin-reform/

Shaun Murray on LinkedIn: www.linkedin.com/in/shaunmmurray/

Interview with Chetan Joshi, founder, Margin Reform https://www.youtube.com/channel/UC7H1deJO6Ef-iOSpi14xefA?view_as=subscriber

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Perspectives Blog, News and Updates

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Episode Guest: James Clunie - Head of Strategy, Absolute Return Jupiter Asset Management interview by Roy Zimmerhansl

In this episode James shares his views and insights into the concept and practice of short selling.

James joined Jupiter in 2013. He is currently Head of Strategy, Absolute Return and manages the Jupiter Absolute Return Fund (Unit Trust) as well as the Jupiter Global Absolute Return fund (SICAV).

Before joining Jupiter, James worked at Scottish Widows Investment Partnership as an Investment Director of equities, and managed a long/short equity fund and UK long-only funds.

James was a senior lecturer in finance at the University of Edinburgh between 2003 and 2007, prior to which he worked as Head of Global Equities at Aberdeen Asset Management and Director and Head of Asset Allocation at Murray Johnstone International.

James gained a degree and PhD from Edinburgh University and is a CFA® charterholder.

Timeline of interview:

3:50 - The psychology of short selling and why some people are so strongly anti-short selling

9:35 - Discussion over the impact of short sellers on market peaks and troughs

12:35 – Personal challenges of being a short seller

17:45 – Is it a good time to be a short seller?

21:45 – Different short selling approaches

25:43 - Why were fewer short selling bans applied as compared to 2008? 

33:20 – James’ thoughts on corporate bonds and short selling

34:35 – Regulatory asymmetry between longs and shorts

41:06 – Are long investors that don’t do securities lending at an information disadvantage?

45:55 – James’ closing thoughts

Referenced during the interview: 

Short-selling related books authored by James Clunie:

PREDATORY TRADING AND CROWDED EXITS: New thinking on market volatility https://amzn.to/30Pjgr6

SHORT SELLING: An evidence-based introduction https://amzn.to/3ecpGo4

Video interview: Do short-selling bans work? Boaz Yaari, Founder & CEO of Sharegain talks to Securities Finance TV https://vimeo.com/420084597

Follow Pierpoint:

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Twitter @pierpointfc

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Andy Dyson has been leading the International Securities Lending Association as CEO for the past four years during a time of historic regulatory finalisation and roll-out. In today's episode, Andy shares his thoughts and views on industry priorities, the need for improved communications and various impending regulations.

3:40 - Review of ISLA priorities in light of COVID-19

6:30 – ISLA focus on communications

11:18 – ISLA/ISF Global Investor July webinar series

22:00 – the outlook for the implementation of SFTR and CSDR

34:20 – The ongoing roll-out of EU Capital Markets Union

40:45 – ESG and the launch of ISLA Council for Sustainable Finance

51:17 – Common Domain Model

59:25 – Andy’s closing thoughts

 Referenced during the interview:

The Basics of Securities Lending video – https://youtu.be/E42XA0g_wrY

Andy Dyson blog - Reflections of the CEO: https://www.isla.co.uk/news/reflections-of-the-ceo-10/

ICSF Principles: https://www.isla.co.uk/isla-council-for-sustainable-finance/

Common Domain Model paper: https://www.isla.co.uk/thought-leadership/the-future-of-the-securities-lending-market-an-agenda-for-change/

Follow ISLA at the following locations

Website: https://www.isla.co.uk/

LinkedIn: https://www.linkedin.com/company/international-securities-lending-association/

ISLA on Twitter @_isla

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@pierpointfc

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Subscribe to Pierpoint Perspectives Blog, News and Updates

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Jeroen Bakker and John Arnesen provide the answers to the question: What do Borrowers want from Lenders?

Blog post identifying key factors for lenders in making their portfolios more attractive to borrowers:

https://www.pierpoint.info/post/key-factors-in-making-securities-lending-portfolios-attractive

Pierpoint website:

https://www.pierpoint.info

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