The International Securities Lending Association (ISLA) is a trade group founded to represent the interests of the Securities Lending Sector.

Based in the United Kingdom, The International Securities Lending Association’s (ISLA) main headquarters, is comprised of financial service firms whose members are from the UK and Europe. These trade groups deal with insurance, asset and funds management and securities-related transactions.  The main priority of its members is to work with regulators from the UK and Europe, on several key concerns concerning the industry, most importantly, the UK Money Markets Code.

The Purpose of the UK Money Market Code

A financial instrument in the securities industry, has as its sole purpose, the infusion or diffusion of cash quickly and in large denominations to or from an institutional buyer or seller, both regionally and globally. An example might be a negotiable certificate of deposit, municipal notes and repurchase agreements (also known as repo). The UK Money Market Code has been important in the regulation of these instruments. It has served to strengthen trust and confidence between institutional trade members. Its purpose is to address certain key factors: ethics, confidentiality, and the oversight of the professional execution of settlements of financial instruments.

Global Master Securities Lending Agreement (GMSLA)

ISLA also participates and represents members regarding the Global Master Securities Lending Agreement (GMSLA). GMSLA is a key component for preserving trust among its members in the execution of contractual documentation globally, particularly for Europe as most of the institutions participate in trans-national market trading.

The GMSLA has among its key components, a how-to section when it comes to the substitution of collateral and gross-up taxes unrelated to manufactured payments on collateral. It also offers solution-oriented options in the case of a failure to redeliver equivalent securities or collateral, and explains how to do set-offs, as well. It is an instrumental “go-to” among the global trading community. Notably, the ISLA also has some extensive how to section specifically related to securities financing transactions, including guides on how to do securities lending and how to vote for corporate activities and elections, when and where voting rights are warranted. ISLA includes documentations and case studies for review as well, particularly on ETF (exchange traded funds) and for Dividend Arbitrage, helpful for any institutional trading participant. These are only a few, among many contributions availed to the financial sector through ISLA. Their work with regulators ensures a more streamlined, consistent, and secure securities lending market for all. ISLA boasts more than 130 institutions on its membership roster, and they are well reputed for interconnecting members as well as expedient correspondence.

Although public trust is always slow to evolve, the emergence of ISLA, assures that financial markets should be guaranteed a better future moving forward.