AMP Life, the parent of AMP’s superannuation business, has not resumed securities lending from AMP Financial Services’ $66 billion asset pool after suspending the practice in the depths of the financial crisis.
AMP Life, which administers AMP’s superannuation products, is reviewing its securities lending program “on an ongoing basis” after stopping it in December 2008 amid extreme equity market volatility, according to a company spokeswoman.
BNP Paribas Securities Services (BNP PSS) manages AMP’s securities lending program. BNP PSS entered the Australian market in 2003 after buying the fund administration and custody business of AMP and became its first outsourced provider of these services.
When its securities lending program was active, AMP Life required borrowers to supply collateral equalling 100 per cent of the value of the securities they aimed to loan, according to company documents. It also maintained a list of approved borrowers, credit limits, and ran risk management procedures.
AMP suspended the program because it was concerned about market volatility rather than a lack of confidence in counterparties following the crash of Lehman Brothers in September 2008, the spokeswoman said. The company would continue to assess markets and, once they have stabilised, determine an appropriate time to resume the program, she said.
AMP Life receives contributions into the AMP Superannuation Savings Trust – the umbrella fund for AMP’s retail super products, such as the SignatureSuper series – and invests them in products run by the organisation’s funds management business, AMP Capital Investors, or in investments outside AMP.