"Pension
funds consider codifying securities lending" By Jay Eden, "Daily
News" ISF Online
June 14, 2004
Some of the world’s
largest pension funds are considering a blueprint
for codifying their involvement in securities lending.
The plan, which includes
the support of Calpers, TIAA-Cref and Hermes, follows
an International Corporate Governance Network (ICGN)
survey which highlighted member concerns regarding
the negative impact that hedge fund activity is
having on voting rights and corporate governance
issues.
The move towards a
code of best practice is planned to be unveiled
at the ICGN conference, to be held in Rio de Janeiro,
Brazil starting July 7 2004.
The report has received
mixed reviews from the financial press. John Piccitto,
managing director at John Piccitto Consulting,
says: “I think the pension funds should have
a code of practice. But they will hopefully come
to their senses and see that securities lending
is not destroying corporate governance as Mr Clearfield
suggests. The Pension funds are savvy investors;
they should know what they are doing with their
shares.”
Another industry insider
said the ICGN research was well balanced and makes
no recommendations, but the subsequent press coverage
is overheated and contains some assertions that
do require additional scrutiny.
