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Securities lending as part of responsible and risk-averse asset management
Journal of Securities Operations & Custody,
7
(3),
234-241
(2015)
Abstract
After reading the popular press it would seem crystal clear: securities lending is the personification of evil and should be eradicated at any cost. However, this does not do justice to this securities finance instrument which fulfils an important role in financial markets. In addition, beneficial owners sometimes have doubts whether the returns outweigh the risks and if the role of responsible investor can be reconciled with securities lending. This paper starts with a short introduction to securities lending and the risks associated with the activity. It provides some food for thought on securities lending and responsible equity ownership and the risks inherent in the product and ends with some lessons learned that are essential for a successful lending programme.
Keywords: securities; lending; ESG; responsible; voting; short; selling; PGGM
The full article is available to subscribers to the journal.
Author's Biography
Roelof Van Der Struik joined PGGM in 1998. PGGM is a not-for-profit service provider for six Dutch pension funds with over e175bn in assets under management, providing pension administration for approximately three million people. Currently, Roelof is Investment Manager with the Front Office Treasury department at PGGM, responsible for securities lending and cash and collateral management. Roelof is a member of the board of the International Securities Lending Association (ISLA).
