SFS: Market requires improved data and more oversight
24 September 2025 UK
Image: SFT
The industry will face an increasing need for more data and oversight while clients look to expand their securities lending programme capabilities, according to panellists at the Securities 麻豆影视传媒 Symposium.
The event held in London hosted the 鈥業ndependent Oversight in Securities Lending: Governance, Monitoring, and Fiduciary Excellence' panel, where participants reviewed the significance of governance, oversight, and due diligence within securities lending programmes.
Dan Rudd, executive director, Agency Securities 麻豆影视传媒 at J.P. Morgan, laid the foundation for the panel through his definition of oversight from an agent lender perspective.
鈥淥ur role is quite simple, we need to consult and we need to make oversight as easy as possible for our client base. It is quite a mature industry, so I believe that every agent lender should have everything in place that a client needs 鈥� and it鈥檚 just about establishing what that is.鈥�
He emphasised the importance of doing oversight, which once made easy for clients, firms can move on to discuss the performance of the programme.
Oversight is an outsource function and can include monitoring counterparties, liquidity, as well as the collateral that is accepted, Rudd noted.
Securities Lending is an outsource function and, as you can imagine, whatever a client is required to do for their oversight, the agent lenders will already be doing exactly the same thing e.g. monitoring counterparties, limits, as well as the collateral that is accepted, to name a few. This is why performing due diligence on your providers is important to understand what they are already doing, Rudd noted.
According to Rob Nunn, director, senior product management at S&P Global Market Intelligence, the levels of oversight, from one side of the spectrum to the other, ranging from beneficial owners that do nothing, to those that do absolutely everything.
Nunn commented: 鈥淭he focus has moved away from performance. There is much more data and solutions being used to help them with their programmes, such as liquidity, risk management, and compliance.
鈥淭he larger asset managers have to look at the activity of securities lending in combination with other activities that they are managing internally in financing their securities. Ultimately, they are looking at 鈥榠s my agent doing a good job?鈥� and 99 per cent of the time, they are.鈥�
Leading the panel forward, moderator Sean O鈥橬eill, managing partner at O鈥橬eill & Associates, asked how firms are setting themselves up, and where the independence lies when it comes to oversight.
Setting the scene, Nunn indicated that data is provided by the market; there is a framework provided by the International Securities Lending Association (ISLA) which covers three pillars: what data should be provided, how it should be aggregated, how it should be used.
For the beneficial owners participating in securities lending, especially in regulated funds, there is guidance provided by the regulators, though there is no regulation as such.
Nunn said: 鈥淭he independent view uses the data provided by the market participants, to create an appropriate peer group and an appropriate benchmark, to ensure you are comparing apples with apples. It could be better, and we should review those standards. In addition, the data that we receive needs to be better as well.鈥�
Discussing whether liquidity management is or should be a part of governance, Rudd noted that in reality, 鈥渋t is something that we do internally, so we鈥檙e monitoring all aspects of liquidity, making sure we can get positions back in time鈥�. Rudd explained that firms need to have the oversight to pick up on potential issues 鈥� 鈥淭he whole point of oversight is trying to identify in the unlikely event there are any issues.鈥�
In terms of balancing operational oversight and performance, Nunn said: 鈥淚t has so many layers. Creating an oversight governance structure of the programme, including who approves which funds can participate in lending, firms need to have that oversight committee before you even start lending.鈥�
Speaking on governance, Rudd alluded: 鈥淗aving the right governance in place, being able to demonstrate it builds on that trust in the relationship that you have with clients. So that is going to help in terms of expanding programmes, working on slightly more strategic opportunities, for example, where there might be additional effort that's required.鈥�
Concluding the panel, Nunn says more regulation and oversight is 鈥渋nevitable鈥�, while Rudd believes there will be a 鈥渢hirst for more information鈥� to expand on the products clients can utilise with their existing securities lending model.
The event held in London hosted the 鈥業ndependent Oversight in Securities Lending: Governance, Monitoring, and Fiduciary Excellence' panel, where participants reviewed the significance of governance, oversight, and due diligence within securities lending programmes.
Dan Rudd, executive director, Agency Securities 麻豆影视传媒 at J.P. Morgan, laid the foundation for the panel through his definition of oversight from an agent lender perspective.
鈥淥ur role is quite simple, we need to consult and we need to make oversight as easy as possible for our client base. It is quite a mature industry, so I believe that every agent lender should have everything in place that a client needs 鈥� and it鈥檚 just about establishing what that is.鈥�
He emphasised the importance of doing oversight, which once made easy for clients, firms can move on to discuss the performance of the programme.
Oversight is an outsource function and can include monitoring counterparties, liquidity, as well as the collateral that is accepted, Rudd noted.
Securities Lending is an outsource function and, as you can imagine, whatever a client is required to do for their oversight, the agent lenders will already be doing exactly the same thing e.g. monitoring counterparties, limits, as well as the collateral that is accepted, to name a few. This is why performing due diligence on your providers is important to understand what they are already doing, Rudd noted.
According to Rob Nunn, director, senior product management at S&P Global Market Intelligence, the levels of oversight, from one side of the spectrum to the other, ranging from beneficial owners that do nothing, to those that do absolutely everything.
Nunn commented: 鈥淭he focus has moved away from performance. There is much more data and solutions being used to help them with their programmes, such as liquidity, risk management, and compliance.
鈥淭he larger asset managers have to look at the activity of securities lending in combination with other activities that they are managing internally in financing their securities. Ultimately, they are looking at 鈥榠s my agent doing a good job?鈥� and 99 per cent of the time, they are.鈥�
Leading the panel forward, moderator Sean O鈥橬eill, managing partner at O鈥橬eill & Associates, asked how firms are setting themselves up, and where the independence lies when it comes to oversight.
Setting the scene, Nunn indicated that data is provided by the market; there is a framework provided by the International Securities Lending Association (ISLA) which covers three pillars: what data should be provided, how it should be aggregated, how it should be used.
For the beneficial owners participating in securities lending, especially in regulated funds, there is guidance provided by the regulators, though there is no regulation as such.
Nunn said: 鈥淭he independent view uses the data provided by the market participants, to create an appropriate peer group and an appropriate benchmark, to ensure you are comparing apples with apples. It could be better, and we should review those standards. In addition, the data that we receive needs to be better as well.鈥�
Discussing whether liquidity management is or should be a part of governance, Rudd noted that in reality, 鈥渋t is something that we do internally, so we鈥檙e monitoring all aspects of liquidity, making sure we can get positions back in time鈥�. Rudd explained that firms need to have the oversight to pick up on potential issues 鈥� 鈥淭he whole point of oversight is trying to identify in the unlikely event there are any issues.鈥�
In terms of balancing operational oversight and performance, Nunn said: 鈥淚t has so many layers. Creating an oversight governance structure of the programme, including who approves which funds can participate in lending, firms need to have that oversight committee before you even start lending.鈥�
Speaking on governance, Rudd alluded: 鈥淗aving the right governance in place, being able to demonstrate it builds on that trust in the relationship that you have with clients. So that is going to help in terms of expanding programmes, working on slightly more strategic opportunities, for example, where there might be additional effort that's required.鈥�
Concluding the panel, Nunn says more regulation and oversight is 鈥渋nevitable鈥�, while Rudd believes there will be a 鈥渢hirst for more information鈥� to expand on the products clients can utilise with their existing securities lending model.
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