Dec. 27, 2021
Real reform for securities lending must include: (1) Notifying public about who is borrowing & lending shares (not just which company’s shares are borrowed or lent) (2) Notifying retail investors that their shares are being lent, (because (a) they don't get to vote & (b) they don't get tax-qualified dividends) (3) Sharing any revenue earned from lending their shares with retail investors (4) Eliminate “Onward Lending” completely (public companies & transfer agents have opposed this for decades) (5) Require every loan to have a due date (not “if applicable”) Finally, it seems likely that Proposed Rule will increase cost and reporting burden of borrowing stock for any reason (cover short sales, close fail-to-deliver, access voting rights, etc.). Unintended consequence may be to tilt broker’s cost/benefit analysis in favor of fails.