Today, CIBC Mellon, Northern Trust, RBC Dexia and State Street Corporation announced the formation of the Canadian Securities Lending Association (CASLA) to advocate on behalf of all securities lending market participants in Canada.
CASLA seeks to enhance the public's understanding of securities lending, encourage the adoption of best practices and work with regulators and other industry associations to ensure an efficient and secure marketplace. CASLA will advocate for the common interests of securities lending market participants, including custodian banks, beneficial owners, asset managers and broker-dealers.
"This is a major step forward in the continuing development of the Canadian securities lending market," said the founding members in a joint statement. "We are pleased that our industry now has a collective voice in Canada and will continue to develop strong linkages with similar global associations."
The four founding companies account for more than 90 percent of the Canadian securities lending market.
Other securities lending associations around the world include the Australian Securities Lending Association (ASLA), International Securities Lending Association (ISLA) in Europe, Pan Asian Securities Lending Association (PASLA) and the Risk Management Association (RMA) in the U.S.
CASLA will canvas industry firms and professionals for membership in the near future, and will hold elections for executive positions in 2010. Participants in the beneficial owner and borrower and lender communities are encouraged to join.
The securities lending market in Canada has been active for several years. In securities lending transactions, beneficial owners such as mutual funds, pension funds and other institutional investors lend securities to borrowers often through intermediaries such as custodian banks. At year-end 2008, the Canadian industry had CAD $886 billion available for lending and CAD $119 billion on loan according to U.K.-based Data Explorers.