BETTER FINANCE has challenged BlackRock, UBS Asset Management and Deka, amongst others, on the revenues generated by their securities lending activities, reigniting a debate about an opaque but lucrative part of the fund industry. Under rules issued by the European Securities and Markets Authority in 2012, asset managers cannot profit from securities lending. However, analysis by Better Finance has revealed large variations in the proportion of securities lending proceeds that investors receive, raising questions over whether asset managers are pocketing revenues not due to them.
Guillaume Prache, managing director of Better Finance, raised concern over whether “a part of securities lending profits is not returned to fund investors”. To investigate further, BETTER FINANCE has asked asset managers to explain why they incur significantly more costs and how they ensure compliance with EU rules. Some of their responses and the full article are available on Financial Times.
To read the full report, click here.
To read the Press Release, click here.