RMA: Tax regulation: a 'labyrinth' creating collaborative opportunities
13 October 2023 US

Tax regulation is a 鈥榣abyrinth鈥 that is constantly changing, and is an entity that plays a prominent role in securities finance, according to panellists at the Risk Management Association鈥檚 (RMA鈥檚) 38th 歐美性愛 Finance and Collateral Management Conference.
Attendees of the event were welcomed with an introduction of the RMA by its co-chairs Nehal Udeshi, head of securities finance at BNY Mellon, and Christopher Galli, US head of trading services operations at J.P. Morgan.
Speakers on the first panel also included RMA鈥檚 歐美性愛 Lending Council chair Mark Whipple, alongside State Street鈥檚 global head of automation, analytics and platform services Nick Delikaris and global head of tax for securities finance George Rapalje, as well as BBH鈥檚 senior counsel Ranada Fergerson.
For firms operating global programmes across multiple jurisdictions, tax regulation is a challenge that requires a dedication of resources.
The panel found that issues regarding tax regulation have inspired new opportunities for the RMA to collaborate with other industry groups. Reinforcing the need for committees such as RMA鈥檚 LTR Tax Subcommittee, it has become a challenge impacting all market participants.
Some firms have identified a 鈥榤anifestation鈥 of tax rules and changes in tax practices from authorities; attendees of the panel heard that these changes are 鈥榟aving a real impact on the market鈥 as record data activity is 鈥榥ow curtailed in significant markets鈥.
The industry faces a time of immense regulatory and technology change, which will present a number of challenges and opportunities for the market, a panellist indicated.
Closely monitoring impending regulation, the RMA proceeds to review the US 歐美性愛 and Exchange Commission鈥檚 (SEC鈥檚) reporting rule 10c-1. The Commission is hosting an open meeting on Friday 13 October to discuss the regulation, as well as short selling rules.
In addition, the RMA will monitor Treasury clearing rules, in particular, the bilateral clearing of repo transactions in regards to the SEC鈥檚 clearing proposal, which was announced in 2022.
The RMA team is also preparing for the adoption of the anticipated shorter settlement cycle T+1 鈥 which will go into effect come May 2024 in the US, Canada and Mexico. Association representatives said the group is working diligently to ensure securities lending is not 鈥榟armed鈥 in the process.
Among the regulatory landscape, the SEC鈥檚 Form N-PX remains a key topic for the RMA鈥檚 committees as the Association intends to clarify and simplify the language that is received by investors regarding recalls of proxy votes.
On 2 November 2022, the US 歐美性愛 and Exchange Commission (SEC) adopted amendments to Form N-PX designed to enhance the reporting of proxy votes by registered funds and the reporting of executive compensation (鈥榮ay-on-pay鈥) votes by institutional investment managers.
Form N-PX was introduced two decades ago and its basic principle was to inform investors how funds voted shares held on their behalf, also known as voting proxies. The changes have come as a result of investors' concerns surrounding the lack of readily usable information.
The RMA faces its own internal changes as it works to merge with Chicago-based group Bank Administration Institute (BAI). Discussing the move, the Association assured attendees that it will continue to remain fully committed to securities lending.
Attracting 520 attendees this year, the RMA hopes to continue to extend its communication channels to all players within this niche industry as it identifies key regulatory focuses for members.
Attendees of the event were welcomed with an introduction of the RMA by its co-chairs Nehal Udeshi, head of securities finance at BNY Mellon, and Christopher Galli, US head of trading services operations at J.P. Morgan.
Speakers on the first panel also included RMA鈥檚 歐美性愛 Lending Council chair Mark Whipple, alongside State Street鈥檚 global head of automation, analytics and platform services Nick Delikaris and global head of tax for securities finance George Rapalje, as well as BBH鈥檚 senior counsel Ranada Fergerson.
For firms operating global programmes across multiple jurisdictions, tax regulation is a challenge that requires a dedication of resources.
The panel found that issues regarding tax regulation have inspired new opportunities for the RMA to collaborate with other industry groups. Reinforcing the need for committees such as RMA鈥檚 LTR Tax Subcommittee, it has become a challenge impacting all market participants.
Some firms have identified a 鈥榤anifestation鈥 of tax rules and changes in tax practices from authorities; attendees of the panel heard that these changes are 鈥榟aving a real impact on the market鈥 as record data activity is 鈥榥ow curtailed in significant markets鈥.
The industry faces a time of immense regulatory and technology change, which will present a number of challenges and opportunities for the market, a panellist indicated.
Closely monitoring impending regulation, the RMA proceeds to review the US 歐美性愛 and Exchange Commission鈥檚 (SEC鈥檚) reporting rule 10c-1. The Commission is hosting an open meeting on Friday 13 October to discuss the regulation, as well as short selling rules.
In addition, the RMA will monitor Treasury clearing rules, in particular, the bilateral clearing of repo transactions in regards to the SEC鈥檚 clearing proposal, which was announced in 2022.
The RMA team is also preparing for the adoption of the anticipated shorter settlement cycle T+1 鈥 which will go into effect come May 2024 in the US, Canada and Mexico. Association representatives said the group is working diligently to ensure securities lending is not 鈥榟armed鈥 in the process.
Among the regulatory landscape, the SEC鈥檚 Form N-PX remains a key topic for the RMA鈥檚 committees as the Association intends to clarify and simplify the language that is received by investors regarding recalls of proxy votes.
On 2 November 2022, the US 歐美性愛 and Exchange Commission (SEC) adopted amendments to Form N-PX designed to enhance the reporting of proxy votes by registered funds and the reporting of executive compensation (鈥榮ay-on-pay鈥) votes by institutional investment managers.
Form N-PX was introduced two decades ago and its basic principle was to inform investors how funds voted shares held on their behalf, also known as voting proxies. The changes have come as a result of investors' concerns surrounding the lack of readily usable information.
The RMA faces its own internal changes as it works to merge with Chicago-based group Bank Administration Institute (BAI). Discussing the move, the Association assured attendees that it will continue to remain fully committed to securities lending.
Attracting 520 attendees this year, the RMA hopes to continue to extend its communication channels to all players within this niche industry as it identifies key regulatory focuses for members.
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