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Securities Lending Market Report | March 2022

Legal Entity ISLA initiated a survey in October 2021 to gather information on those securities missing the Issuer Legal Entity

Identifier. This data point for each security, although mandatory in many jurisdictions now, does not exist for many
legacy ISINs. As it is a required field within the SFTR validation rules for EU issued securities and, soon to be mandatory
for non-EU securities, not having it will cause rejections.
Identifier Although most firms participating in securities lending have Work is continuing on this data set in two work streams;
one to further quantify the data set to determine
no influence over this, a proactive approach has been taken
what impact there may be if SFTR rules render them
to at least highlight and quantify the issue. In this most
recent survey, ISLA requested that other trade associations
second, to discuss alternate best practices that might
reach out to their members to gather as many examples as unreportable and therefore perhaps untradeable. The
possible, with a joint response of over 55,000 unique ISINs reduce any negative side effects from the upcoming SFTR
being gathered. validations. This last point has further nuance in that
different jurisdictions may apply the validation rules in
The data was anonymised and shared with interested different ways or times.
parties to analyse the results. Of the 55,000 securities,
85% were active ISINs which had been issued by ~35,000 The topic will continue to be an agenda item in the monthly
issuers around the world. A large percentage of those were ISLA SFTR Working Group.
based in the U.S., Japan and Korea.

Conclusion

Although the data provided by TRs requires further work to improve the data quality, there
are clearly trends that are consistent with broader market sentiment. We hope to see
the data quality improve further over time, and very much look forward to engaging with
regulators on their interpretation of the SFTR data.

ISLA will continue to track these indices to gain a deeper understanding of securities
lending markets. What are your thoughts? We would welcome any feedback and questions
from readers.