RMA Conference on Securities Lending: Demanding Times

By Mark Dugdale, Securities Lending Times

October 11, 2012
Day Three

Hedge funds have switched their equity trading programs to “defensive mode” as far as capital is concerned, while beneficial owners are demanding more information and transparency from their agent lenders.

The Risk Management Association’s (RMA’s) 29th Annual Conference on Securities Lending featured a panel on global demand trends in equity trading.

Frederick Nadd-Aubert of Credit Suisse, Peter Abric of Wells Fargo Securities, James Gerspach of J.P. Morgan, Carey Chamberlain of HSBC, and Mark Payson of Brown Brothers Harriman analysed key trends from the past few years.

Nadd-Aubert said that hedge funds are going into “defensive mode” as far as capital is concerned, while the rest of the panel identified other trends.

One trend that Chamberlain has observed is that credit diversification has become a big focus. He has also seen US money managers change the way that they operate.

He said: “A lot of US money managers have pulled money out of Europe and are possibly putting it back into their home market, which is fair enough.”

Another trend is that beneficial owners are “more demanding about being informed about opportunities and emerging markets,” according to Gerspach.

Chamberlain added: “There’s been a shift in how trading desks, lenders and hedge funds look at stock lending.”

Clients want research-based products as their emphases on transparency and information have increased, according to Chamberlain. Gerspach agreed, adding: “That demand has certainly taken off and multiplied in the last few years.”

The main change that Payson has identified is how clients view his firm. The firm now acts “as an advisor”, providing information and transparency on a regular basis and before trading is initiated.

Visit www.securitieslendingtimes.com for the latest securities lending news and RMA conference updates. You can also follow the SLT team on Twitter @SLTjustin and @BigEdMarkyD.

You may also be interested in:
Day One highlights
Day Two highlights

About rmablog

Founded in 1914, The Risk Management Association (RMA) is a not-for-profit, member-driven professional association whose sole purpose is to advance the use of sound risk principles in the financial services industry. RMA promotes an enterprise-wide approach to risk management that focuses on credit risk, market risk, and operational risk. Headquartered in Philadelphia, PA, RMA has 2,500 institutional members that include banks of all sizes as well as nonbank financial institutions. They are represented in the Association by 16,000 risk management professionals who are chapter members in financial centers throughout North America, Europe, and Asia/Pacific. Visit RMA on the Web at www.rmahq.org. The Risk Management Association 1801 Market Street, Suite 300 Philadelphia, PA 19103-1628 Phone: 1-215-446-4000
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