Japan GPIF Suspends Equities Securities Lending to Short Sellers

Posted on 12/03/2019


Japan’s Government Pension Investment Fund (GPIF) suspended equities securities lending for short sellers. GPIF sees the practice of stock lending to short sellers as inconsistent with its responsibilities as a long-term institutional investor. The suspension will impact GPIF’s 42.5 trillion JPY foreign equities portfolio. GPIF will continue to conduct lending debt securities. GPIF does not lend its holdings in Japanese shares. GPIF could reconsider the suspension to foreign stock lending if there are improvements in transparency.

Securities lending has been an income generator for large-scale asset owners.

“The current stock lending scheme lacks transparency in terms of who is the ultimate borrower and for what purpose they are borrowing.” according to a press release by GPIF.

Elon Musk, a critic of short sellers, replied to the news.

Keywords: Government Pension Investment Fund Japan.