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Securities Lending Times Interview with CASLA President Donato D’Eramo

CASLA President Donato D’Eramo discusses what delegates can expect to hear at the upcoming conference in Toronto and why it’s important for the industry.

What should delegates expect from this year’s CASLA Conference on Securities Lending?

The Canadian Securities Lending Association (CASLA) was created to ensure the long-term viability of the industry by establishing a common platform and working with a broad spectrum of direct and indirect industry stakeholders. This year’s conference programme brings together a wide spectrum of experts and their perspectives on the securities lending business in Canada and globally. This includes leaders representing the supply and demand sides, regulatory and tax representatives, agent lenders, beneficial owners, hedge funds, and leading consultants. Together they will cover the latest trends and challenges in the Canadian securities lending market.

Delegates can expect an update on the Canadian market from a quantitative market data perspective, as well as insights from panels that will cover a broad range of topics that are important to all stakeholders across the entire value chain.

Delegates will also hear about themes from industry leaders as well as insights centred on current and emerging regulations that may impact securities lending market participants in Canada.

This year we are delighted to welcome entrepreneur and former investor on CBC’s Dragons’ Den, Bruce Croxon, who will deliver the keynote speech.

How has the market changed since last time the industry came together in Canada?

Ongoing focus on balance sheet and capital ratios will continue to have an effect on borrower and lender behaviour, leading to developing constructs for clients and beneficial owners to consider when shaping their offering. Solutions continue to focus on the growth of non-cash capabilities, term and cash offerings where economical, and collateral optimal solutions for stakeholders.

From a macro perspective, the price of oil affected not only most asset prices and the Canadian dollar, but also the price of gold and the positive effect on mining stocks. All of this has led to an active and healthy demand for the industry.

Which panels are you personally most looking forward to?

There are so many to choose from. We have a hedge fund panel focusing on areas such as retail reform on alternative investments and the latest product innovations; the securities lending panel seeking the views across the entire value chain, and potentially how it may be changing; and an always interesting discussion on the tax and regulatory panel. I’m looking forward to hearing from the panellists and know they will bring a lot of great insight for the group to consider.

What are the main challenges facing CASLA currently and how are they being tackled?

From an industry perspective, we are focused on a few priorities such as enhancing the public’s understanding of the role that securities lending plays in capital markets, as well as working collaboratively with regulators and industry partners to implement change and support an efficient and secure marketplace.

Developing strong linkages with similar global trade associations is also essential, as is advocating for the common interests of securities lending market participants, including custodian banks, beneficial owners, asset managers and broker-dealers.

In addition, we are working on regulatory themes that touch on capital and leverage ratios and potential downstream impacts for all constituents, including banks, broker-dealers and agent lenders. We also continue to work on certain regulations and their impact on certain segments of the market such as Canadian mutual funds, and the National Instrument to the extent that collateral profiles can be expanded to allow for broader market alignment.

For those coming to Toronto from overseas that may not fully understand the Canadian market, what would you like the key takeaways to be?

We hope attendees gain a greater understanding and interest in dealing with Canadian institutions and clients, understanding that Canada is one of the larger and more sophisticated markets in the world, and that our institutions and businesses are maturing ‎and becoming more global. Finally we hope they will come to further appreciate the importance of the Canadian market, banks, dealers, financial institutions, as clients and counterparts.

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