A global business: Securities lending, regulation and T+1
28 May 2024
Ahead of the 14th annual CASLA conference, Sophie Downes catches up with its two newest board members about what market participants can expect from this year鈥檚 event
Image: stock.adobe.com/saifur
According to Kyle Kolasingh, RBC鈥檚 head of market services solutions, the work of the Canadian Securities Lending Association (CASLA) is 鈥渁bout future proofing and continuing to enhance the overall health of the securities lending industry here in Canada鈥. The words are pertinent ahead of the association鈥檚 14th annual conference in Toronto.
Kolasingh was appointed to the CASLA board at the general meeting on 4 March. Joining him was Mathilda Yared, managing director of global securities finance at the National Bank of Canada.
Together, the two aim to contribute to the ongoing work and advocacy of the association. Securities 麻豆影视传媒 Times caught up with both board members to discuss their new positions and to reveal the overarching themes of this year鈥檚 conference.
A path to CASLA
Yared鈥檚 鈥渢rue interest鈥 in finance began after joining the National Bank of Canada in 2007. Here, she spent three years working in internal audit for financial markets 鈥 鈥渋t was a great way to learn all the business lines, front to back鈥.
The journey to her current role would not have been possible without the positive work culture of National Bank, she acknowledges. "[They] foster a culture that encourages drive, curiosity, and internal mobility, so I took full advantage of the opportunity to learn." The results of this can be seen in the various roles Yared has held within the firm, working in Montreal, New York and Toronto.
As Yared describes it, her appointment to the CASLA board is the logical next step in this evolution. 鈥淭he Canadian marketplace is an important part of the National Bank strategy,鈥 she explains. 鈥淗aving a voice in an industry association that is paramount to the evolution of securities lending in Canada is important.鈥
Her fellow board member shares a similar career trajectory. Kolasingh started his career as part of the deal management team at RBC Investor Services, which, with humour, he attributes the 鈥渂lame鈥 for 鈥渂ringing me into the fold of this dynamic, engaging and increasingly interesting industry鈥.
He details the various paths he has taken throughout his tenure at RBC, having worked in operations, risk and investment analytics, and on a large-scale technology implementation. 鈥淓ach of these experiences contribute to the work that I do for the Market Services team today,鈥 he explains.
"Whether it's drawing on my experiences in corporate actions or the quantitative nature of investment analytics, my path through the organisation has positioned me well in servicing our securities lending clients and providing solutions for their portfolio needs."
Yet, his position at RBC is just one of the titles he bears. Alongside his position of head of market solutions, he is chair of the Diversity, Equity and Inclusion (DEI) Steering Group for the International Securities Lending Association (ISLA), and will retain his role as coordinator for CASLA 鈥 a title he has held since 2020 鈥 until a successor is appointed. Is it difficult to balance these various hats?
鈥淲hen you are passionate about something, it is a lot easier to achieve balance,鈥 he declares, citing the support of RBC and industry players as being instrumental in allowing this to happen. His passion pours through into his commitment to social initiatives, a cause which Kolasingh feels particularly strongly about.
At last year's CASLA conference in May 2023, he moderated a panel titled 鈥楾he Role of Representation, Advocacy and Education鈥. Two months later, he began his role as chair of ISLA鈥檚 DEI Group. For Kolasingh, working towards a goal is integral for achieving balance, providing him 鈥渢he opportunity to make lasting change within the financial services sector鈥.
T+1
In an industry that is constantly evolving, where can we expect to see the most significant change over the coming year?
An obvious suggestion is the long-awaited move to faster settlement. 鈥淭he focus right now is on T+1, whether this is in the lead-up (at the time of talking) or following implementation,鈥 affirms Kolasingh. Yared is in fervent agreement.
T+1 is not a new focus for the industry. Indeed, it has dominated conferences, panel discussions, and company targets for the past year. And as multiple markets prepare to implement a shortened settlement cycle, both Yared and Kolasingh agree that the topic will not be going away anytime soon.
鈥淕iven the lack of automation in recalls, T+1 has been the needed impetus to modernise processes in the Canadian market,鈥 details Yared, highlighting the formative impact the move has had on the industry.
She is well versed in this space. As part of CASLA鈥檚 T+1 working group, Yared worked closely with TMX CDS, various vendors, as well as representatives of US industry associations, to discuss challenges the securities lending industry would face, as well as potential solutions.
This history will no doubt inform her insights on the 鈥楾+1 in the Rearview鈥 panel 鈥 and there is plenty she plans on discussing.
鈥淕iven the timing of the CASLA Conference 鈥 a mere week and a half after the T+1 go-live 鈥 I am hoping to discuss any issues the industry did not anticipate,鈥 Yared remarks. She hopes to gauge the insights of other panellists: are they seeing an increase in recalls? Have they noticed a reduction in supply and liquidity? In which ways has the securities lending industry benefitted from the shortened settlement cycle?
She is quick to point out the 鈥渒ey role鈥 CASLA played in clarifying best practices for market participants, as well as ensuring constructive communication with other industry associations.
Kolasingh also recounts the vast amount of time and effort CASLA has invested into T+1 over the past 12 months. Nonetheless, he emphasises that the association鈥檚 work will continue 鈥渨ell beyond鈥 the 27 May transition date.
Working with the wider financial landscape will be a significant part in this. 鈥淭he nature of our industry is far more global today than it was just seven years ago when I first joined the business, and the need for ongoing collaboration across regions is imperative,鈥 he explains.
鈥淎s other markets, such as the United Kingdom, look to adopt the shorter settlement timeframe, we will undoubtedly be working closely with fellow trade associations to share our firsthand experiences.鈥
A global business
Besides T+1, a significant point of focus for the conference will be regulation.
Conference participants can expect a discussion around the US Basel Endgame proposal and an update on key market infrastructure topics 鈥 themes which Yared expects to really 鈥渞esonate鈥 with the audience.
For the former panel, CASLA has employed a common Croatian expression in its headline to preface its discussion of the US Basel Endgame proposal. Titled 鈥楻egulatory Discussion: Who is Drinking and Who is Paying?鈥, the phrase denotes a confused and disorganised situation, highly apt in light of the regulation鈥檚 impact on the market.
Indeed, following the vast debate the rule has been subject to, the panel offers a chance for participants to weigh-in and ask questions, promising to 鈥渟park an engaging discussion鈥 among those in attendance.
Meanwhile, the final panel of the day, titled 鈥楴avigating Post Trade Challenges and Partnering in Industry Transformation鈥, will explore the revolution of market infrastructure. For both Yared and Kolasingh, these will be key points of focus for CASLA for the remainder of 2024, and even into 2025.
鈥淪ecurities lending is a global business,鈥 says Yared. 鈥淩egulation introduced in other jurisdictions will have cross-border impacts that will affect our members.
鈥淒uring my tenure on the board, my hope is to continue engaging with key market participants and industry associations, focusing on regulatory topics that have broad ramifications.鈥
Kolasingh is equally focused on the future. 鈥淲hether it鈥檚 the Bank of Canada鈥檚 upcoming introduction of a settlement fail fee, proposed rule amendments in the fully paid lending space, SEC 10c-1a or ongoing advocacy on behalf of our members, there is lots to do!鈥
Kolasingh was appointed to the CASLA board at the general meeting on 4 March. Joining him was Mathilda Yared, managing director of global securities finance at the National Bank of Canada.
Together, the two aim to contribute to the ongoing work and advocacy of the association. Securities 麻豆影视传媒 Times caught up with both board members to discuss their new positions and to reveal the overarching themes of this year鈥檚 conference.
A path to CASLA
Yared鈥檚 鈥渢rue interest鈥 in finance began after joining the National Bank of Canada in 2007. Here, she spent three years working in internal audit for financial markets 鈥 鈥渋t was a great way to learn all the business lines, front to back鈥.
The journey to her current role would not have been possible without the positive work culture of National Bank, she acknowledges. "[They] foster a culture that encourages drive, curiosity, and internal mobility, so I took full advantage of the opportunity to learn." The results of this can be seen in the various roles Yared has held within the firm, working in Montreal, New York and Toronto.
As Yared describes it, her appointment to the CASLA board is the logical next step in this evolution. 鈥淭he Canadian marketplace is an important part of the National Bank strategy,鈥 she explains. 鈥淗aving a voice in an industry association that is paramount to the evolution of securities lending in Canada is important.鈥
Her fellow board member shares a similar career trajectory. Kolasingh started his career as part of the deal management team at RBC Investor Services, which, with humour, he attributes the 鈥渂lame鈥 for 鈥渂ringing me into the fold of this dynamic, engaging and increasingly interesting industry鈥.
He details the various paths he has taken throughout his tenure at RBC, having worked in operations, risk and investment analytics, and on a large-scale technology implementation. 鈥淓ach of these experiences contribute to the work that I do for the Market Services team today,鈥 he explains.
"Whether it's drawing on my experiences in corporate actions or the quantitative nature of investment analytics, my path through the organisation has positioned me well in servicing our securities lending clients and providing solutions for their portfolio needs."
Yet, his position at RBC is just one of the titles he bears. Alongside his position of head of market solutions, he is chair of the Diversity, Equity and Inclusion (DEI) Steering Group for the International Securities Lending Association (ISLA), and will retain his role as coordinator for CASLA 鈥 a title he has held since 2020 鈥 until a successor is appointed. Is it difficult to balance these various hats?
鈥淲hen you are passionate about something, it is a lot easier to achieve balance,鈥 he declares, citing the support of RBC and industry players as being instrumental in allowing this to happen. His passion pours through into his commitment to social initiatives, a cause which Kolasingh feels particularly strongly about.
At last year's CASLA conference in May 2023, he moderated a panel titled 鈥楾he Role of Representation, Advocacy and Education鈥. Two months later, he began his role as chair of ISLA鈥檚 DEI Group. For Kolasingh, working towards a goal is integral for achieving balance, providing him 鈥渢he opportunity to make lasting change within the financial services sector鈥.
T+1
In an industry that is constantly evolving, where can we expect to see the most significant change over the coming year?
An obvious suggestion is the long-awaited move to faster settlement. 鈥淭he focus right now is on T+1, whether this is in the lead-up (at the time of talking) or following implementation,鈥 affirms Kolasingh. Yared is in fervent agreement.
T+1 is not a new focus for the industry. Indeed, it has dominated conferences, panel discussions, and company targets for the past year. And as multiple markets prepare to implement a shortened settlement cycle, both Yared and Kolasingh agree that the topic will not be going away anytime soon.
鈥淕iven the lack of automation in recalls, T+1 has been the needed impetus to modernise processes in the Canadian market,鈥 details Yared, highlighting the formative impact the move has had on the industry.
She is well versed in this space. As part of CASLA鈥檚 T+1 working group, Yared worked closely with TMX CDS, various vendors, as well as representatives of US industry associations, to discuss challenges the securities lending industry would face, as well as potential solutions.
This history will no doubt inform her insights on the 鈥楾+1 in the Rearview鈥 panel 鈥 and there is plenty she plans on discussing.
鈥淕iven the timing of the CASLA Conference 鈥 a mere week and a half after the T+1 go-live 鈥 I am hoping to discuss any issues the industry did not anticipate,鈥 Yared remarks. She hopes to gauge the insights of other panellists: are they seeing an increase in recalls? Have they noticed a reduction in supply and liquidity? In which ways has the securities lending industry benefitted from the shortened settlement cycle?
She is quick to point out the 鈥渒ey role鈥 CASLA played in clarifying best practices for market participants, as well as ensuring constructive communication with other industry associations.
Kolasingh also recounts the vast amount of time and effort CASLA has invested into T+1 over the past 12 months. Nonetheless, he emphasises that the association鈥檚 work will continue 鈥渨ell beyond鈥 the 27 May transition date.
Working with the wider financial landscape will be a significant part in this. 鈥淭he nature of our industry is far more global today than it was just seven years ago when I first joined the business, and the need for ongoing collaboration across regions is imperative,鈥 he explains.
鈥淎s other markets, such as the United Kingdom, look to adopt the shorter settlement timeframe, we will undoubtedly be working closely with fellow trade associations to share our firsthand experiences.鈥
A global business
Besides T+1, a significant point of focus for the conference will be regulation.
Conference participants can expect a discussion around the US Basel Endgame proposal and an update on key market infrastructure topics 鈥 themes which Yared expects to really 鈥渞esonate鈥 with the audience.
For the former panel, CASLA has employed a common Croatian expression in its headline to preface its discussion of the US Basel Endgame proposal. Titled 鈥楻egulatory Discussion: Who is Drinking and Who is Paying?鈥, the phrase denotes a confused and disorganised situation, highly apt in light of the regulation鈥檚 impact on the market.
Indeed, following the vast debate the rule has been subject to, the panel offers a chance for participants to weigh-in and ask questions, promising to 鈥渟park an engaging discussion鈥 among those in attendance.
Meanwhile, the final panel of the day, titled 鈥楴avigating Post Trade Challenges and Partnering in Industry Transformation鈥, will explore the revolution of market infrastructure. For both Yared and Kolasingh, these will be key points of focus for CASLA for the remainder of 2024, and even into 2025.
鈥淪ecurities lending is a global business,鈥 says Yared. 鈥淩egulation introduced in other jurisdictions will have cross-border impacts that will affect our members.
鈥淒uring my tenure on the board, my hope is to continue engaging with key market participants and industry associations, focusing on regulatory topics that have broad ramifications.鈥
Kolasingh is equally focused on the future. 鈥淲hether it鈥檚 the Bank of Canada鈥檚 upcoming introduction of a settlement fail fee, proposed rule amendments in the fully paid lending space, SEC 10c-1a or ongoing advocacy on behalf of our members, there is lots to do!鈥
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