Let Securities Lending take you...

Make idle assets work harder with Securities Lending. Behind the scenes, we generate low-risk additional revenues on your securities. The only impact on your business is enhanced performance figures, and today, every basis point counts.

We offer tailor-made agency, principal and lending solutions with remote access to suit your precise needs.

CACEIS, your comprehensive asset servicing partner.

Contact: seclending@caceis.com dynamic collateral selection required by ESG-oriented clients, which is heavily dependent on IT and costly data like ESG indexes. Automating AGM data collection and management to ensure timely securities recalls is also major a challenge that only technology will help address.

Why securities lending is still a great opportunity for beneficial owners in 2023

Three main themes are emerging for beneficial owners this year: ESG, cash reinvestment and collateral pledge.

Regarding ESG, regulators had been clear about the important role securities lending plays in financial market efficiency. So, the consensus we are seeing amongst ESG/SRI lenders that lending can be compatible with their portfolio strategy is very important. The difficulty comes from the variations in the approach. To resolve this, the International Securities Lending Association (ISLA) has drafted a set of good practices for ESG matters which establish a comprehensive framework for action. This will certainly help beneficial owners fine tune their lending programme.

Regarding cash reinvestment, the positive interest rate environment has changed the perception of the asset owners on the possibility of reinvesting the cash received as collateral. Nevertheless, the investment supports remain an essential choice for the client. It must be sufficiently secure not to increase portfolio risk, that is why so far, most reinvestment is currently performed via money market funds.

The third theme concerns pledge structures which can allow agent lenders to maintain an aggressive profit split or even offer a better one.

Data providers note that pledge (as opposed to transfer title) structured transactions doubled last year so there is clearly a trend here and clients willing to accept this type of collateral have an excellent opportunity to enhance the profitability of their lending programme.

Donia Rouigueb - Head of Sales Securities Finance and Repo: “Regulation-driven transparency and ESG-focused best practices is good news for lenders as it gives them confidence to lend their securities, they are enhancing the value for their investors and playing a key role in maintaining market liquidity.”

Securities lending is safer than ever and remains a legitimate source of additional revenues for beneficial owners into 2023, and as long as the constraints service providers face are not too restrictive, clients and their end-investors will continue enjoy the performance enhancement possibilities in this promising market.

Donia Rouigueb, Head of Sales Securities Finance and Repo

CACEIS is an asset servicing banking group dedicated to institutional and corporate clients and one of the world’s market leaders in asset servicing. CACEIS’ Securities Finance desk designs bespoke securities lending, borrowing, liquidity and collateral management services for its clients, leveraging its group’s core asset servicing activity as well as a broad regulatory expertise to meet its clients’ specific risk/return requirements.

Julien Berge and Olivier Zemb both joined CACEIS in 2019 respectively as Head of Fixed income & repo in Luxembourg and Head of Equity Finance & Collateral Trading in Luxembourg.

Donia Rouigueb joined CACEIS in 2015 and is currently Head of Sales for Securities Finance and Repo services, developing tailormade products for institutional, asset manager and corporate clients of the custodian franchise.