Securities Lending Regulatory and Legal

Regulatory & Legal

RMA acts as a liaison between the financial services industry and bank regulatory agencies. As a nonprofit professional association, RMA does not lobby on behalf of the industry. However, RMA meets often with industry regulators to discuss issues of mutual concerns such as the impact of the slowing economy on bank portfolios.

The RMA Committee on Securities Lending has formulated comments focusing on the Credit Mitigation aspects of The New Basel Capital Accord, released by the Basel Committee on Banking Supervision on January 16, 2001. These comments were submitted to the Basel Committee on Banking Supervision, the Federal Reserve Board, the Federal Reserve Bank of New York, and the Office of the Comptroller of the Currency for the comment period ending May 31, 2001. The comments and exhibits were developed by the RMA Basel Subcommittee consisting of several member institutions and chaired by Tracy Coleman of State Street Bank and Trust Co. From time to time RMA continues to comment on Basel papers where appropriate. RMA wishes to acknowledge and thank all participants for their effort to formulate these comments and meet the deadline of the project.

  • November 16, 2017; Comment Letter - Extension of Notice 2010-46 and Qualified Securities Lender (“QSL”)
  • August 31, 2016; Comment Letter - Internal Revenue Service proposed Qualified Derivatives Dealer (“QDD”) rules
  • August 5, 2016; Comment Letter - Restrictions on Qualified Financial Contracts of Systemically Important U.S. Banking Organizations and the U.S. Operations of Systemically Important Foreign Banking Organizations
  • June 3, 2016; Comment Letter - Single-Counterparty Credit Limits for Large Banking Organizations
  • March 28, 2016; Comment Letter - Use of Derivatives by Registered Investment Companies and Business Development Companies
  • March 11, 2016; Comment Letter - Standardized Approach
  • January 5, 2016; Comment Letter - Haircut floors for non-centrally cleared SFTs
  • September 4, 2015; ISLA, RMA, and PASLA Joint Comment Letter - Data Elements and Granularity (related to securities lending and borrowing)
  • August 11, 2015; Comment Letter - Investment Company Reporting Modernization
  • March 27, 2015; Comment Letter - Revisions to the Standardised Approach for Credit Risk
  • February 12, 2015; Comment Letter - ISLA, RMA and PASLA joint response to the Consultative Document Standards and Processes for Data Collection and Aggregation
  • June 27, 2014; ISLA and RMA joint response letter to the follow up meeting with the FSB Data Expert Group
  • April 11, 2014; ISLA and RMA joint response to FSB Data Expert Group
  • November 28, 2013; Comment Letter - Consultative Document on Strengthening Oversight and Regulation of Shadow Banking
  • September 20, 2013, Comment Letter - Revised Basel III leverage ratio framework and disclosure requirements.
  • June 28, 2013, Comment Letter - Response to Consultative Document on Supervisory Framework for Measuring and Controlling Large Exposures
  • January 14, 2013, Comment Letter - Proposed Policy Framework for Addressing Shadow Banking Risks in Securities Lending and Repos
  • October 18, 2012, RMA Comment Letter re. Basel III Proposed Rules
  • September 26, 2012, Comment Letter to FSB’s Thematic Peer Review on Resolution Regimes
  • May 25, 2012, ISLA, RMA and PASLA joint response to the Interim Report of the FSB Workstream on Securities Lending and Repos.
  • April 30, 2012, Comment Letter - Enhanced Prudential Standards (pdf)
  • November 8, 2011, Comment Letter Associated with Issues related to Securities Lending Activities Under "OLA".  
  • Earlier this year, the IRS released its FAQ on basis reporting --  In the report, they included language in response to RMA’s request for clarification.  In particular, at question 21, the IRS states the following:

    21. Are transfer statements required in the case of securities transferred in connection with a loan?
    The regulations do not require transfer statements for transfers in which the transferor lends or borrows a security and acts as the principal directing the loan (such as when a transferor arranges the transfer of securities to open or close a short sale).  This exception applies whether the transferor lends its own securities or lends its customer’s securities when the customer has granted the custodian general permission to lend the securities.  The exception does not apply when the transferor’s customer acts as the principal directing the loan by arranging the lending or borrowing agreement.
  • February 10, 2011, comment letter submitted to the US Treasury on Section 6045A Transfer Statements. 
  • October 20, 2010, Concept Release Comments
  • October 20, 2010, CSFME RMA Interim White Paper
  • October 20, 2010, letter from RMA’s Executive Committee on Securities Lending to the Securities and Exchange Commission relating to the Concept Release on the US Proxy System, together with A Report to Market Participants and Regulators Regarding Proxy Voting Practices and Issues dated October 2010.
  • September 20, 2010, letter from RMA’s Executive Committee on Securities Lending to the Internal Revenue Service in response to certain requirements contained within the proposed cost basis reporting regulations to be issued pursuant to The Energy Improvement and Extension Act of 2008.
  • May 27, 2010, letter from RMA’s Executive Committee on Securities Lending to State of New York Insurance Department in response to the Department’s circular letter on prudent securities lending practices.
  • September 25, 2009, letter from RMA’s Executive Committee on Securities Lending and The Securities Lending Division (“SLD”) of the Securities Industry and Financial Market Association to the Securities and Exchange Commission relating to the current state of the US securities lending markets, notions of a centralized marketplace for securities lending as well as a securities lending central counterparty.
  • March 29, 2007, RMA's Committee on Securities Lending Comments on the NPR for Risk-Based Capital Standards: Advanced Capital Adequacy Framework
  • May 27, 2005, Comments on the Consultative Document “The Application of Basel II to Trading Activities and the Treatment of Double Default Effects”
  • RMA's Committee on Securities Lending Comments on Consultative Paper #3 (CP3) of the New Basel Capital Accord 
  • Joint Letter from ISDA, LIBA,TBMA & RMA to the Basel Sub-Group on Portfolio Backtesting 
  • RMA's response to the Basel Sub Group on additional credit mitigation issues for securities lending and repo style transactions 
  • Comments on the Consultative Package of The New Basel Capital Accord 
  • Exhibit One 
  • Exhibit Two 
  • Exhibit Three