Message from LMA CEO Scott McMunn
Dear Members,
As we reach the midpoint of 2024 and enjoy the summer sunshine and the Euros, I am delighted to update you on the progress we at the LMA have made so far. Thank you for your continued support and engagement, which have been instrumental in helping us achieve our goals during this period. Our key priorities remain the following:
- Championing institutional investment in the loan market
- Driving growth and innovation in sustainable finance
- Promoting technology as a driver of efficiency
Reflecting on my first half-year of leading this organisation, I believe that we are performing well and making progress on many fronts. We aim to build on this strong foundation further in the second half.
As with any organisation, there are areas for development. We have set ambitious goals and are clear that we have more work to do to achieve them. In some ways, we have not moved as quickly as I would have liked, partly due to the rapid change in product evolution and capital market flows. The latter are increasingly coming from non-banking financial institutions, which are attracting greater attention from the media and regulators alike.
It also reflects our new strategy and the direction of the LMA. Transforming our approach towards a large book of work will take more time than it would to maintain the status quo. All our efforts are focused on driving loan market efficiency and transparency and making an impact on the issues that are important to our members.
We have also significantly changed the tone and brand of the LMA. I hope you can see the different LMA voice reflected in our work, our interactions with you, and even the outcomes we deliver.
That is my perspective, but I would appreciate your views—where are we doing well, too much or not enough? Where are we moving too fast or too slowly? Please email me with your feedback at [email protected].
Our membership has continued to grow steadily, with over 50 new organisations joining us from various sectors and geographies. We have seen strong representation from technology providers, institutional investors, and asset allocators. This expansion reflects our commitment to representing the broadest possible range of participants in the EMEA loan markets. In my meetings with members, I am seeing both greater engagement and greater trust.
I would also like to highlight our engagement with other trade associations to ensure that we adopt a coordinated approach and take advantage of our complementary strengths and areas of expertise. As previously, we are working closely with the Loan Syndications and Trading Association (LSTA) and the Asia Pacific Loan Market Association (APLMA)— what you might call the “loan family” of trade associations. We have also broadened our engagement to include the International Capital Market Association (ICMA), the FICC Markets Standards Board (FMSB), the International Association of Credit Portfolio Managers (IACPM), and the European Fund and Asset Management Association (EFAMA), among others.
In the first half of 2024, we have undertaken a significant amount of advocacy. We have liaised closely with regulatory bodies on several topics, particularly in relation to our current work on the European Securities and Markets Authority (ESMA)’s UCITS Eligible Assets Directive. Our response, focusing on loans and CLOs, aims to incorporate member feedback to ensure that our industry’s voice is heard. We encourage members to continue sharing their views with Nick Voisey at [email protected] ahead of the end of the consultation period on 7 August.
We are also focusing on private credit—you can see my comment piece in The Banker here and fund finance, a growing area that is under increasing scrutiny. We have launched a new Horizons quarterly sustainability newsletter and have been supporting our members with the IBOR transition (see below for further details). We are also looking to increase our engagement with the Middle East on regulatory matters.
Our ongoing work on Primary Delayed Settlement Compensation continues to progress. Here, we are developing guidelines and supporting materials, including webinars and FAQs, to help members understand and implement best practices in this area.
Our focus in our events and education initiatives is on holding fewer but better events, supplemented by our usual training and networking.
Of the numerous successful events that we have hosted in the first half, I am particularly proud of our inaugural FutureLend conference, aimed at young professionals in the sector. This event received overwhelmingly positive feedback, highlighting the value of nurturing the next generation of leaders in the loan markets and understanding their perspectives. We are planning to establish a Junior Board to shape the future agenda of this landmark event, supported by our recently launched LinkedIn alumni community.
In April, we launched our Real Estate Finance Conference, bringing together key players in the sector to discuss trends and opportunities. We also held our first certification course in the Middle East, demonstrating our commitment to supporting members in this critical region.
Our sustainable finance work continues to gain momentum. The launch of our ESG publication, Horizons, has been a great success, attracting over 6,000 subscribers to date. This quarterly publication offers expert perspectives on sustainable finance and the only regulatory tracker exclusively focused on the loan markets. We also published the Guidelines for Sustainability-Linked Loans Financing Bonds (SLLBs) in collaboration with ICMA. These guidelines establish a robust foundation for financial institutions to integrate sustainability principles into their lending practices and bond issuances.
We have also been actively supporting members as they navigate the IBOR transition. With synthetic USD LIBOR ending in September, we are working with a range of trade associations and regulators to ensure that the market is well-prepared. Our efforts include tackling the slow adoption of EURIBOR fallbacks, for example through member roundtables and providing guidance on the transition to new risk-free rates.
Enhancing loan operations is a key part of our strategy. We have launched initiatives to reduce the average settlement time by 25 percent in 2024 and improve efficiencies, supported by new tools and technology solutions. In June, we held a successful Operations conference that attracted 200 delegates, and we have launched an operations newsletter, Challenging the Timeline, to update our members on developments in this area. Paul Taylor, a seasoned practitioner with buy- and sell-side expertise in running operations and settlement teams, has joined the LMA to lead our loan operations initiatives.
As we enter the second half of the year, we have a number of flagship events planned, including our first annual European conference in Paris in October and our annual conference on the theme of “Further Together”, reflecting the importance of collaboration on industry topics during a period of rapid change. We are also planning an inaugural gathering of members and non-members, including institutional investors and other long-term investors, where we will showcase the work of the LMA.
We are establishing a series of new committees focused on operations, sustainability, regulation, documentation, institutional investors, and events, training, and diversity. These six committees will be Board-led to ensure that we align our activities with members’ needs and priorities.
We will continue to place great importance on transparent communication with you, our members. Communication is a two-way process and we are pleased to have seen an increase in engagement from you in terms of requests and suggestions and to have received positive feedback on the work of the LMA team.
Best wishes,
Chief Executive Officer, Loan Market Association
