The Mutual Fund Directors Forum announced Thursday that it has released a special report titled “Practical Guidance for Directors on the Oversight of Securities Lending.”
The Forum’s report provides an overview on how securities lending works in order to help directors make informed decisions about securities lending in their funds, while also highlighting the risks involved in securities lending and explaining potential issues and pitfalls of which directors need to be vigilant.
“Securities lending plays a significant role in today’s capital markets and is believed to improve overall market efficiency and liquidity,” Susan Ferris Wyderko, president and CEO of the Forum, said in a statement. “In addition, securities lending plays a critical role in certain hedging strategies, acts as a useful tool in risk management and helps facilitate the timely settlement of securities trades. As such, we feel it’s important that we arm our members with educational material on this topic to assist them in their important oversight work.”