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CASLA: Canada is underdeveloped and must rethink collateral approach

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CASLA: Canada is underdeveloped and must rethink collateral approach

The Canadian market requires improvement, especially in terms of repo and collateral, according to panellists at the Canadian Securities Lending Association (CASLA) conference in Toronto.

The panel discussed post-trade challenges in the session entitled ‘Market Infrastructure Revolution: Navigating Post Trade Challenges and Partnering in Industry Transformation’.

Moderated by Steve Everett, head of business strategy and Post Trade Innovation at TMX, panellists agreed that the Canadian market requires improvements in the collateral space.

According to Nick Chan, managing director, head of financial resource management at BMO Capital Markets, “Canada is unique”.

“When I look at how we operate compared to other jurisdictions, we tend to come through things by collaboration, discussion and standardisation,” he added.

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Triparty was not a term that was known to local Canadian participants until very recently, said Chan, who believes that this has come from “the fact that we have had good access to well-developed funding markets that did not rely on us to have much collateral reuse”.

During the discussions, Chan indicated that collateral has become a core part of the way the Canadian market manages risk. In the area of collateral reuse, he believes that “we have been underdeveloped, and there is an opportunity to evolve”.

He continued: “The Canadian market has been very resilient, but there is an opportunity for us to evolve the infrastructure to pave the way for more innovation and liquidity, which will lead to more Canadian market participation in the future.”

Following this topic, Maksym Padalko, operations and policy advisor at the Bank of Canada, highlighted that the country lacks a general collateral market. In addition, he stated that the term repo market could also “be more active”, and usage of Canadian collateral or securities in foreign markets, such as in the US and Europe, could be expanded.

“In terms of the importance of having the proper infrastructure, there are broad systemic benefits,” Padalko explained. “If you have a well developed term repo market, for example, and you face sudden volatility like what we have seen in the past, term repo markets can help to absorb some of those shocks — such as risks, big price moves and margin calls — in the near term.”

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Adding to the debate, Value Exchange CEO Barnaby Nelson pinpointed how the “incredible costs” the industry carries everyday to support the current infrastructure in the collateral repo space, from a balance sheet, risk-weighted asset (RWA) and operational cost perspective, was “striking”. He asked: can we afford not to?

He concluded: “There is no way we can run our collateral and repos in 10 years in the same way that we do now. We are just entering the triparty era in Canada, arguably, the revolution is well advanced in Europe and Asia. It would be wrong to think we have the luxury of time.”

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FGS Global names global chief financial and operating officer

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FGS Global names global chief financial and operating officer

Mark Harris (pictured) will join FGS Global in September and succeed Ajay Junnarkar, the global CFO who has held the role since October 2019.

Harris is currently executive vice-president and CFO at Nasdaq-listed Heidrick & Struggles. He previously held senior finance roles in the US and Asia at investment firms Hercules Capital and Avenue Capital Group, and earlier at Hutchison Telecoms and outsourcing business VSource Pty.

At FGS Global, Harris will oversee all aspects of the finance function and the Global Technology team, the agency said, and “enhance the firm’s operations by leading our global operating committee”.

Harris will report directly to global chief executive Alex Geiser, who said: “With nearly three decades of experience, Mark’s proven track record of success overseeing global finance operations in numerous industries, including professional service organisations, will be instrumental as we continue to build the leading communications advisory firm for the stakeholder economy.”

FGS, the global strategic advisory and comms firm founded in its current form in December 2021, after the merger of Finsbury Glover Hering and Sard Verbinnen, received new investment in April 2023 from private equity firm KKR in a deal that valued the consultancy at $1.425bn. Finsbury Glover Hering was earlier formed from the merger of WPP stablemates Finsbury, The Glover Park Group and Hering Schuppener.

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Roland Rudd, global co-chair of FGS and one of the founders, said: “On behalf of everyone at FGS, I thank Ajay for his valuable contributions to the company. Ajay made a positive and lasting impact on our business, helping lead FGS through a period of growth and transformation following the combination of Finsbury, The Glover Park Group, Hering Schuppener and Sard Verbinnen – and through the growth investment by KKR in April 2023.”

Harris said: “FGS is a unique consultancy that offers clients a strategic communications and advocacy partner that helps leadership teams navigate complexity, and I am excited and honored to be joining the team at this pivotal time. I look forward to working closely with the executive team and board to help accelerate financial and operational growth and expansion for the next chapter of the business.”

Global revenue at FGS Global grew eight per cent in 2023 to $455.4m, according to PRWeek’s Agency Business Report.

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Councilwoman calling for No Confidence vote on Nashville’s finance, law directors over ‘mishandling’ of funds

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Councilwoman calling for No Confidence vote on Nashville’s finance, law directors over ‘mishandling’ of funds

NASHVILLE, Tenn. (WSMV) – A Metro City Council member is filing a No Confidence resolution for the city’s finance and law directors for “their mishandling of Metro Arts grant funding due to personal grievances and personal relationships.”

Councilwoman Joy Styles has filed the resolution after accusing Metro Director of Finance Kevin Crumbo and Metro Director Wallace Dietz of allegedly mishandling the funds.

Styles claims the Metro Arts grants distribution process was stunted by the duo while they slandered the reputations of the former Metro Arts Executive Director, Executive Director of the Metro Human Relations Commission and a council member.

“The application of equitable award distribution has been at the heart of the chaos,” Styles said in a press release. Several applicants still have not been paid and are required to use their awards by the end of fiscal year 2024, June 30th. The confusion has broken the trust between the city and the arts community and needs to repaired. Accountability and correction is necessary.”

Styles, Arts Equity members, community activists and other council members are set to hold a press conference on Tuesday evening.

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“A culture change is overdue within Metro Nashville government as it pertains to race, equity and anti-racism practices, and the individuals that maintain status quo problems cannot be the same individuals to provide solutions,” Styles said.

Councilwoman Styles, an artist, Elisheba Mrozik and former Metro employee Mike Lacy are set to speak at the press conference.

“Arts Equity Nashville formed in response to severe and deep and manufactured inequities in arts funding in Nashville. That is how we know we are on the right side of history, so we keep up this fight and support Council Member Joy Styles’ resolution of No Confidence in Wally Dietz and Kevin Crumbo for their disrespect towards artists and their allies, their lack of compliance with Title VI and civil rights law, and their continued overreach in dismembering democratic procedures,” Arts Equity Nashville said.

WSMV4 has reached out to both Crumbo and Dietz for comment. Dietz responded with no comment to the councilwoman’s call for a press conference.

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Finance

Structured Finance Pros Rejoin King & Spalding From Milbank – Law360 Pulse

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Structured Finance Pros Rejoin King & Spalding From Milbank – Law360 Pulse

Two attorneys from Milbank LLP are returning to King & Spalding LLP in New York just over a year after they departed the firm….

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