Short Selling and Securities Lending
The role of short selling came into focus following the 2008 and 2009 financial crisis and the discussion continues to resurface. Most recently, in 2020 discussions about short selling resumed when a small number of jurisdictions imposed short selling restrictions, followed in 2021 by further questions in the wake of market volatility caused by meme stock trading (such as “Gamestop”).
Securities lending plays an important role by adding liquidity to markets and reducing trading cost. It also provides a source of income to institutional investors and enables short selling, thus facilitating better risk management by investors. We continue to engage with the supervisory committee to underscore the importance of short selling and securities lending in fair and efficient markets.