FIX Protocol Ltd. (FPL) and the South African Securities Lending Association (SASLA) have signed a Memorandum of Understanding outlining a collaborative approach to developing a best-practice model for the automation of securities lending and borrowing transactions. Both organisations says that they believe agreement on a universal business definition, coupled with using the FIX messaging protocol as a common message standard, will increase efficiency and facilitate automation.
The organisations will jointly form a Securities Lending and Borrowing Working Group (SLBWG) to share market expertise and on the project. In the first phase of the initiative, FPL and SASLA will work together to produce guidelines that will aim to maintain the integrity of the message structure and to document industry practices to ensure implementation by market participants. A gap analysis will serve as the basis for future developments in the processing of securities lending and borrowing transactions on a global level.
The second phase of the initiative will entail an in-depth review of product coverage and the various processes in the securities lending and borrowing (SLB) transaction lifecycle. The expected results of the project are an increase in transaction transparency and a decrease of operational risk and costs.
“We are pleased to collaborate with SASLA to develop and implement a common protocol for the automation of SLB transactions,” says Gavin Borrageiro, co-chairman of the EMEA Southern Africa Executive Committee, FPL.
“Collaborating with a global standards organisation like FPL will guarantee that SASLA is able to deliver the best solution for the industry,” adds Belinda Kasch, Executive Committee Member, SASLA.