UBS restricts ETF securities lending
28 May 2014 Zürich
Image: Shutterstock
UBS has limited the amount of securities that its equity exchange-traded funds (ETFs) can lend out.
The Swiss bank issued a statement saying: “According to the European fund UCITS directive, securities lending may be up to 100 percent.”
“Actual lending rates for UBS ETFs have been considerably lower. To provide our clients with more security we have decided to limit securities lending for all UBS equity ETFs to 50 percent.”
The decision was announced on 12 May but became effective on 1 April.
BlackRock made a similar move in 2012, limiting securities lending in its iShares ETFs to 50 percent following clients’ concerns about exposure to counterparty risk.
The Swiss bank issued a statement saying: “According to the European fund UCITS directive, securities lending may be up to 100 percent.”
“Actual lending rates for UBS ETFs have been considerably lower. To provide our clients with more security we have decided to limit securities lending for all UBS equity ETFs to 50 percent.”
The decision was announced on 12 May but became effective on 1 April.
BlackRock made a similar move in 2012, limiting securities lending in its iShares ETFs to 50 percent following clients’ concerns about exposure to counterparty risk.
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