Kevin Taylor, a ShareSoc member, has pointed out to me in relation to my article page 12 of ShareSoc’s August newsletter, that stock-lending simply does not (should not under FCA rules) take place from standard pooled nominee accounts, the likes of which most retail investors would use. The FCA’s rules could not be more explicit in this area: “A firm must not undertake or otherwise engage in stock lending activity with or for a customer unless … the firm has obtained the consent of the customer;” From: https://www.handbook.fca.org.uk/handbook/CASS/2/5.html?date=2005-01-13
He also noted that it is ShareSoc’s role to educate the retail investor base to banish this myth, so I am happy to make members aware of this information and thank Kevin for his information.
I remain of the view that stock lending is an opaque activity, hence the ongoing debate about zero fees and fund managers hanging on to the stock lending revenues.
Cliff Weight
That may be so where there are listed shares held rather than funds in a nominee account, but that surely does not apply to funds who can I think do what they want without the consent of the fund holders. That might also apply to investment trusts. If I am wrong, you will no doubt correct me.