Securities Lending & Borrowing: Operational Challenges - Livestreamed
New dates TBC - e-mail education@icmagroup.org to register your interest

OVERVIEW
COURSE SYLLABUS
COURSE DETAILS
TEST YOUR KNOWLEDGE

Securities Lending & Borrowing has been an important activity within the securities marketplace for many years. Firms that choose to lend their equities and/or bonds do so in order to earn lending fees and to enhance their investment returns. Conversely, firms that choose to borrow securities typically do so primarily to meet delivery commitments and to receive sale proceeds in a timely fashion.

However, undertaking securities lending & borrowing transactions is not without risk. The mitigation of exposures is an essential daily task, involving the regular revaluation of both the lent/borrowed security and the associated collateral. Companies are also required to make margin calls on the counterparty and settlement of such margin calls.  

Additionally, corporate actions may arise which can impact the lent security and/or securities collateral.

It is therefore of paramount importance that those responsible for processing such transactions possess a clear understanding of the risks involved, their potential exposures and critically, what mitigating measures are necessary.


Course Outcomes

By completing the course you will be able to:
  • Appreciate why firms engage in securities lending & borrowing
  • Understand the primary content of securities lending legal agreements and how firms are impacted operationally
  • Identify the operational level risks and best practice mitigation methods
  • Comprehend the advantages/disadvantages of using different types of collateral
  • Understand each step in the trade and collateral lifecycle
  • Appreciate the impact that corporate actions have on the lent security and on securities collateral


Who should attend?

The course is suitable for personnel working within many departments of financial institutions such as operations, middle office, risk, legal, accounting and IT. The course is applicable to buy and sell-side firms, plus those working within central securities depositories and custodians.  

The course is targeted towards those currently working within a securities lending department who would benefit from an all-round understanding of the topic. In addition, those who have had limited exposure to the topic but who require a greater understanding of the relationships between their work and securities lending & borrowing.   


Course Trainer

Gail Rolland
Mike Simmons
The course content is divided into several topic areas, which are then broken down into multiple subtopics:

  • Fundamental Securities Lending & Borrowing Concepts

  • Securities Lending & Borrowing Trade Lifecycle - An Overview
    Legal documentation
    Trade execution
    Opening & closing leg settlement
    Exposure calculation
    Margin calls
    Recall/return of lent settlements
    Settlement of fees
  • Securities Lending & Borrowing Marketplace Participants
    Lenders, Borrowers and Intermediaries
    The Lender’s Perspective: Motivations and Considerations
    The Borrower’s Perspective: Motivations and Considerations
  • Legal Documentation
    The GMSLA
    Securities lending agency agreement
    The GMRA
  • Characteristics of the Lent/Borrowed Security
    Equity vs Bond
  • Securities Lending & Borrowing and Associated Collateral
    Fundamental collateral concepts
    Margin: Purpose & use
    Types of collateral
    Collateral and SL&B Fees
  • The Securities Lending & Borrowing Trade Lifecycle
    Pre-trading
    Trade execution
    Pre-settlement
    Settlement of opening leg
    Throughout lifetime of trade
    Settlement of closing leg
    Settlement of fees
  • Updating Books & Records
    Securities bookkeeping: Definition & purpose
    Essential securities bookkeeping concepts
    Importance of updating books & records
    Updating books and records for lent/borrowed securities, non-cash securities, cash collateral, fees and rebates
  • Accessing the Securities Lending & Borrowing Marketplace
    Bilateral lending & borrowing
    ICSD’s: Failed trades management
    ICSD’s: Tri-party agent
    Global custodians
    Third-party lending agents
    Central counterparties
  • Securities Lending & Borrowing and Corporate Actions
    Corporate actions lifecycles: Overview
    Treatment of income: Cash dividends
    Entitlement to income on lent securities
    Treatment of income
           Short selling of equity
           Lent/borrowed equity
           Equity collateral
           Lent bonds & bond collateral
           Treatment of voting rights
           Treatment of withholding tax
  • Regulation
    Introduction
    EU financial transactions tax
    Reporting to a central trade repository
  • Risks in Securities Lending & Borrowing from the Lender's and the Borrower's Perspective


Course Delivery


If you are taking the livestreamed course, you have six months to study the material.

If you’re taking the classroom-based course, the training is delivered on two consecutive days between Monday and Friday.

Please note:


Please bring to the course a normal/standard calculator that is capable of accepting at least 12 digits (e.g. 999,999,999.99); examples of such calculators are the Office Depot AT-814 and the Canon LS-123K.

Livestreamed Course


ICMA courses are delivered via video conferencing accessed on our digital learning platform, using the most effective pedagogical approaches and incorporating interactive functions like virtual breakout rooms.

The Securities Lending & Borrowing: Operational Challenges live sessions are delivered in four 3.5 hour sessions over the course of two weeks. You will be given access to the course materials before the live sessions, and will have access to those for a total of six months. During these six months you will have the option to keep working through the course materials at your own pace.

Next datesTBC
Register your interest for this course at education@icmagroup.org



Livestreamed course fees

Members: EUR 1,650 + VAT (if applicable)
Non-members: EUR 2,050 + VAT (if applicable)

Costs include full access to the online campus, associated learning materials and the examination fee. Please note that payment must be received before the start of the course.




Contact

Should you have any queries, please contact education@icmagroup.org.



Test your knowledge

Trade financing
Portfolio enhancement
Risk management
GMSBB
GMRA
GMSLA
One week
Open (good till cancelled)
One month
The lender
The borrower
At the beginning
Throughout the trade
At the end
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