New SL guide for UK pension funds
13 September 2010 London
Image: Shutterstock
A group of UK financial trade bodies has published a new guide to securities lending for UK pension funds.
Pension fund trustees have long called for more information on securities lending, while industry participants have expressed concerns that use of securities lending by pension funds will not rise without further education.
Speaking to the Financial Times, Julian Le Fanu, policy adviser for investment regulation and funding at the National Association of Pension Funds, said: "The concerns have been on two issues: first, whether lenders are fully aware of the risks involved, and alongside that, that lenders might not be fully aware of the benefits of stock lending."
The guide, said Le Fanu, is independent and neutral, and points out both the benefits and the risks of getting involved in securities lending. It covers the administrative and operational aspects of the service, and gives a checklist of questions that trustees should ask before embarking on a programme.
It's estimated that around 70 per cent of larger UK pension funds are currently active in securities lending, while smaller funds are more likely to get involved through pooled vehicles.
Pension fund trustees have long called for more information on securities lending, while industry participants have expressed concerns that use of securities lending by pension funds will not rise without further education.
Speaking to the Financial Times, Julian Le Fanu, policy adviser for investment regulation and funding at the National Association of Pension Funds, said: "The concerns have been on two issues: first, whether lenders are fully aware of the risks involved, and alongside that, that lenders might not be fully aware of the benefits of stock lending."
The guide, said Le Fanu, is independent and neutral, and points out both the benefits and the risks of getting involved in securities lending. It covers the administrative and operational aspects of the service, and gives a checklist of questions that trustees should ask before embarking on a programme.
It's estimated that around 70 per cent of larger UK pension funds are currently active in securities lending, while smaller funds are more likely to get involved through pooled vehicles.
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