Bank of England Securities Lending Committee Settlement Efficiency Report

The Bank of England's Securities Lending Committee has published its Settlement Efficiency Report. The findings have been collated by a Working Group since H2 2023. The aim was to highlight the issues around settlement efficiency in the U.K., building on the work conducted by the International Securities Lending Association. The report confirms that the persistent level of settlement failure within the U.K. securities lending market would be significantly reduced with: (i) enhanced static data management; (ii) real-time communication of position-impacting data between parties; (iii) consistent trade and lifecycle event instruction discipline; (iv) increased investment in pre- and post-trade automation; and (v) a market-wide adoption of industry best practices. It lists a series of recommendations on ways to alleviate the current level of settlement fails. The Committee considers that the report can be useful to all market participants, given it relates to achieving a robust settlement rate alongside a more transparent, real-time framework to address failing and failed securities transactions.

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