Securities Lending: your questions answered
This booklet aims to give beneficial owners of securities a balanced overview of securities lending. It addresses concerns that owners may have about risks and short selling; and highlights the potential revenue from securities lending as well as its wider importance to market liquidity and efficiency. The benefits of securities lending have been widely recognised by regulators, market participants and academics around the world. ISLA and its members hope this publication is of use and welcome participation in the market.
Securities Lending: your questions answered [April 2009]
Securities Lending: your questions answered
Securities Lending: Your Questions Answered (Spanish translation, translation kindly sponsored by JP Morgan)
An Introduction to Securities Lending
At the start of 2003, The Bank of England’s Securities Lending and Repo Committee established a sub-group with representatives from The London Stock Exchange, The London Investment Banking Association, The British Banker’s Association and ISLA. The goal was to produce an up-to-date publication on Securities Lending that would be available free of charge and for distribution as widely as possible.
The resulting publication is available to read and download below.
| An Introduction to Securities Lending [ v1, March 2004 ] |
| Executive Summary |
| Chapter 1 - What is securities lending? |
| Chapter 2 - Lenders and intermediaries |
| Chapter 3 - The borrowing motivation |
| Chapter 4 - Market mechanics |
| Chapter 5 - Risk, regulation and market oversight |
| Chapter 6 - Frequently asked questions |
| Appendices |
 | Download all chapters . . . |
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Please note that each PDF file is between 1-2MB in size.
Securities Lending and Short Selling
ISLA has published an updated version of its paper on securities lending and short selling, setting out ISLA's views and reviewing the academic literature. The first version of the paper was published in May 2008. This third version includes references to subsequent publications by regulators and academic studies of the temporary short selling restrictions imposed in various markets in September 2008.
Securities Lending and Corporate Governance
This 2005 paper offers a series of measures that should be implemented by lending institutions to enable securities lending to be in line with good corporate governance. These recommendations include:
Transparency - All stakeholders, not just securities lending professionals, e.g. fund managers and corporate governance professionals, should have a thorough working knowledge of the overall framework necessary to combine good corporate governance with a successful securities lending programme.
Consistency - A clear policy is required so that any perceived economic conflict between the securities lending income forgone and the "value" of recalling to vote is addressed explicitly.
Information - All stakeholders should have access to the necessary information in time to make informed decisions.
Timing - Issuers might consider the scheduling of the dividend timetable and the possibility of further separating the record date from the AGM. This would allow lenders to participate in dividend-related lending activity with less voting conflict.
| Securities Lending and Corporate Governance [ 4 July 2005 ] |
| Full Report |
Click the PDF Icon to view the document online. Right Click and 'Save Target As' to download.
Please note that the file is ~2MB in size.