Roy Zimmerhansl – Introduction to Securities Lending

Everything you need to know about the fundamentals of Global Securities Lending.

This course delivers everything a student needs to know to grasp the fundamentals of Global Securities Lending. The course is delivered over a 9-week programme with a new lecture each week, culminating with a final test.

Securities lending is practised in over 40 countries around the world and is a key building block of capital markets in developed and developing markets. The course is taught by a recognised global industry expert who has taught securities lending courses in over a dozen countries.

Securities lending is part of the market and after taking this course students will see how it affects investments, have a holistic grasp of how their job might be engaged with lending and be able to discuss the market more confidently with colleagues, peers and clients.

What You’ll Learn In Introduction to Securities Lending

Welcome

• Welcome from the Instructor
• What to expect in this course
• Curriculum overview
• ISLA Video – Securities Lending Explained
• About the Instructor

Basics of the business

• Recommended pre-lesson and post-lesson material
• Curriculum
• Securities Lending – a part of your life?
• Key Characteristics and Why do Lenders lend?
• Why Borrowers borrow and key market statistics
• Lecture recap

Participants, Stakeholders and Structure

• Market participants and stakeholders with examples
• Legal relationships between participants
• Transaction flow overview
• Routes to market
• Lecture recap
• Recommended reading

Pre-trade and Post-trade Lifecycles and Processes

• Introduction
• Commentary on Short Selling and Naked Short Selling
• Locates – Instruction Flows – Failed Trades
• Buy-ins
• Books and Records
• Mark to Market
• Dividend and Interest Payments
• Voting
• Fee Billing
• Lecture Recap

Trading and Performance Benchmarking

• Hedge Fund Strategies
• Securities Lending Trading
• Performance benchmarking
• Lecture recap

Collateral – Alpha generator or safety net?

• Introduction
• Why Collateral?
• Preferences
• Collateral Transformation
• Collateral Types and Two Models
• Triparty Structure
• Statistics
• Collateral Conundrum
• Collateral Summary
• Lecture Recap

Securities Lending Risks

• Securities Lending Risk Introduction
• Credit Risk
• Market Risk
• Legal Risk
• Operational Risk
• Reputation Risk
• Risks and Mitigants Summary
• Lecture Recap

Relevant Regulations

• Introduction to Regulations
• Reg SHO
• EU Short Selling
• Securities Finance Transactions Reporting
• Central Securities Depository Regulations
• Liquidity Coverage Ratio/ Net Stable Funding Ration
• Uncleared Margin Rules
• The Others …
• Lecture Recap

Review of Global Financial Crisis, Securities Lending & Lehman

• Introduction
• Global Financial Crisis Causal Factors
• GFC Timeline & Policy Changes
• Capital and Leverage
• What Happened in Securities Finance
• Legacy and Aftermath
• Lehman Default Introduction
• How Lehman Interacted with Securities Lending
• Lehman Default Impact
• Lehman Default Losses
• Lecture Recap

Final Lesson and Exam

• Introduction to the Final Week
• Lesson 1 Review
• Lesson 2 Review
• Lesson 3 Review
• Lesson 4 Review
• Lesson 5 Review
• Lesson 6 Review
• Lesson 7 Review
• Lesson 8 Review
• Final Exam
• What’s next?