RMA highlights paper “Addressing Misconceptions in Securities Lending” from March 2022

Securities lending is a well-established practice with many documented benefits to the broader capital markets. For those lenders engaged in a securities lending program, it is a means to generate incremental returns on long positions. Securities lending generated $9.28 billion in lending revenue in 2021, according to Datalend.(1) According to RMA data, the global securities lending market includes approximately $30 trillion in lendable assets and on-loan balances of $2 trillion. Despite securities lending being a widely adopted practice, misconceptions still exist. The intent of this paper is to address some of these misconceptions.

Myths addressed:

  • Short selling leads to market volatility and drives down security prices
  • Securities lending lacks transparency
  • Securities lending is inconsistent with ESG

The full paper, dated March 2022 but being highlighted now on LinkedIn, is available here.

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