In my last column, Securities lending wake-up call, I discussed securities lending, the practice whereby investment fund managers lend out securities to mainly hedge funds to sell short. As mentioned, the practice raises risk levels, dampens the value of securities at times, and generates sizable lending fees that are often funneled in whole or large part to the fund itself.
A lot of smart persons spend their working days conceptualizing and strategizing about lending out the securities that investment funds hold for their unit holders. How to do it better, how to do more, how to increase yield .
To get an idea of who is involved and what they are talking about these days, check out the agenda of the security-lending conferenceto be held on June 15-16 in New York City.
There are also blogs on securities lending. Stock Lending Todayis written by one of the consultants vying for a piece of the business. Its a good reference for learning more about the industry and staying abreast with developments.
The industry is becoming increasingly organized. In April, a group of Canadian organizations with interests in securities lending announced the formation of the Canadian Securities Lending Association (CASLA) to advocate on behalf of all securities-lending market participants in Canada. And, as they say:
CASLA seeks to enhance the public’s understanding of securities lending, encourage the adoption of best practices and work with regulators and other industry associations to ensure an efficient and secure marketplace.
If industry members are the only ones making their voices heard in the public realm, then fund holders will likely continue to get what appears to be the short end of the stick.
Blogs & Comment
Securities lending: well developed and organized
By Larry MacDonald
In my last column, Securities lending wake-up call, I discussed securities lending, the practice whereby investment fund managers lend out securities to mainly hedge funds to sell short. As mentioned, the practice raises risk levels, dampens the value of securities at times, and generates sizable lending fees that are often funneled in whole or large part to the fund itself.
A lot of smart persons spend their working days conceptualizing and strategizing about lending out the securities that investment funds hold for their unit holders. How to do it better, how to do more, how to increase yield .
To get an idea of who is involved and what they are talking about these days, check out the agenda of the security-lending conferenceto be held on June 15-16 in New York City.
There are also blogs on securities lending. Stock Lending Todayis written by one of the consultants vying for a piece of the business. Its a good reference for learning more about the industry and staying abreast with developments.
The industry is becoming increasingly organized. In April, a group of Canadian organizations with interests in securities lending announced the formation of the Canadian Securities Lending Association (CASLA) to advocate on behalf of all securities-lending market participants in Canada. And, as they say:
CASLA seeks to enhance the public’s understanding of securities lending, encourage the adoption of best practices and work with regulators and other industry associations to ensure an efficient and secure marketplace.
If industry members are the only ones making their voices heard in the public realm, then fund holders will likely continue to get what appears to be the short end of the stick.