According to a recent International Monetary Fund report, the global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability. As we approach the end of what has been branded ‘the year of elections’, this opening session to the conference will consider what the rolling impacts of geopolitics have been on the outlook, both globally and for individual countries.

Against the backdrop of the previous sessions and drawing upon ISLA’s Securities Finance Regulatory Horizon Scanner published early this year, this session will look at the political and market drivers that will shape broader capital markets regulation over the coming year(s).

Join senior leaders and subject matter experts from across the securities finance value chain as they delve into the evolving landscape. This session will explore the forces that are shaping the industry, including:
• Current performance and investment strategies and how they are influencing decision-making.
• Core regulatory drivers that are shaping business models.
• Themes such as operational resilience are how they are impacting trading, product, and operational plans.

It is generally recognised that the European post-trade landscape remains highly fragmented and in itself is a barrier to many of the aspirations outlined in the EU’s Capital Markets Union. This session will consider the intersection of these broader aspirations and the nuances that characterise SFTs operating in a multi-CSD/CCP environment. Leading then into a deeper dive into many of the challenges that operations and post-trade teams are grappling with, including the ongoing settlement efficiency discussion, jurisdictional nuances, the tidal wave of T+1, CSDR and its imposition of cash penalties, and the ongoing reality of managing cyber risks.

Has the market responded to the call for change by regulators and how will it change to meet the complexity of these challenges?

The management and use of collateral has always been at the core of our markets, including post-trade and operations, based on the nature and basic mechanics of a securities finance transaction. Our opening session of the afternoon, which will act as a primer for the subsequent panels and as we turn our attention to the theme of efficiency, will look at the evolving role and demands on collateral, notably with the global move towards T+1, but also Uncleared Margin Rule requirements. Amongst other things, it will also consider liquidity versus mobility, the role of Central Banks, as well as the path to tokenisation.

Whilst monopolies are often regarded as anti-competitive, they can bring benefits such as standardisation, market efficiency and the provision of liquidity. As an industry however, we continue to see a proliferation of platforms, products, and solutions coalescing around key themes such as efficiency, regulation, and reporting. In the wake of many recent and significant outages, and a spotlight on operational and cyber resilience, not least from regulators, how do we address this challenge of fragmentation? Surely that means less interoperability? Is this a manifestation of a new trend in ownership across the service provider sector and the influence of private equity investment, that will see an architectural renaissance of legacy providers?

Undoubtedly, many of our industry’s challenges, notably within post-trade and operations, are a symptom of a lack of standardisation – whether born from fragmentation or a lack of consistent taxonomies. So, with many technology concepts such as blockchain or distributed ledger, now past the proof-of-concept stage and no longer regarded as ‘new’, and a continued emergence of various networks, such as Canton, that allow participants to confidently exchange data and value, and seamlessly solve for the challenge of interoperability, what is the barrier to wider adoption?

This final session of the day will try and bring together the earlier discussion(s) and focus on how we move from often abstract discussions to widespread adoption, and what success would look like from the perspective of the various stakeholders across our industry. Is it a lack of understanding of these concepts and a need for better education and evangelism, or are the costs and technological uplift just far too prohibitive?